China to the rescue?

Why buy a theme park like Disneyland? Or an automotive classic like Ferrari?

China to the rescue?

China to the rescue?

Why invest in football teams like the Russian Oligarchs? – Forget it, the must-have hot purchase right now for seemingly the only country on the planet experiencing actually fiscal growth as opposed to shrinkage, China, is that sexy status symbol everyone needs to have – European debt! Ooh, that does have a ring to it, doesn’t it?

Not really, but besides buying up Europe’s dwindling stock of Chateau Lafite Rothschild 1981 and single malts that cost as much as the single currency is worth, the Chinese have promised Italy’s Finance Minister, Giulio Tremont, that ‘don’t fear, we’re here to buy your sovereign debt, and invest!’ That sounds like music to Europe’s ears, but is it a reality or just hot air, and will it just buy Italy a bit more time?

Many analysts fear that this is just dinner table chatter and nothing more. In a recent Guardian article, head of fixed income research at Evolution Securities, Gary Jenkins, pointedly shot down this China-as-savior notion, “If it really came to pass then it would provide an immediate confidence boost. I just won’t hold my breath.” Citing that the European community has heard this before concerning its sovereign debt, but ultimately it has been the ECB that has taken up the cause (and now losing a key minister due to this practice). Another key analyst suggested that the “internal political wrangling” would have to stop in countries like Italy and America, in order to see a return of market confidence – a lofty notion, but one that might ultimately prove more fruitful for those ailing eurozone nations, rather than just selling off the state to Beijing.

20 comments

  • China is on its way to bring a revolution in the economy. As it is the fastest developing nation ever. And its GDP is also crossing 10. And china is also showing here that it is rapidly developing.

  • China is an growing economic power who is right now rescuing the only one so called super power, so it is mean that we are witnessing a new era which is emerging in front of us

  • China is no doubt a powerhouse in the global market. Hence, it does not come as a surprise that they are bringing forth something into the global economy. I am sure the country will take on a more crucial role in years to come.

  • China was a sleeping giant a few decades ago. It came to extreme power through its hard work. The history of China would show that the Chinese are a bunch of people who have the record of sacrificing everything just for the intentions of gaining success. Today, China is the nation that can actually do what they say. I can even see further moves by this great nation into contributing more to the many governments of the world.

  • If there is anyone who can save italy then it is china.But i don not think china is going to do it.Because in the past china has never done anything like that.China has huge foreign money reserves but i don’t think they are going to invest any of them in any italian companies.They may buy some italian bonds but they are not going to do something large such as to save italy from its huge debt….

  • China has turned the market upside down! Before China was the one seeking help from big nations but now China is the one giving and promising help. I hope China’s promise to Italy’s Prime Minister is not a dinner table chatter as seen by many analysts. If they really would buy Italy’s sovereign debt, and invest is something we have to wait and see!

  • I must say a well written article you have here. China is one of the largest growing population and yes is developing and succeeding day by day. But I highly doubt they will rescue or help through other countries debt. As many have said before me they are willing to proceed if they have a gain or something towards them in this situation I dont believe they have anything going for them or to gain.

  • Sleeping giant China is now awake. Those old sayings is now never been used anymore. China is a power house country now which is one of the world’s richest.

  • As of China, I doubt its consequence. Yes, China is a very progressive country , Most of them were developed later irrespective of China. And really China never had overpowering superiority in technologies…

  • In fact, China has grown much larger. The growth of China’s fastest rewarding concern for countries in Europe. And Vietnam too when the next Chinese invasion may be more all the time.

  • We all clearly have something to learn from China, but will we ever learn? I live in the UK and I very much doubt it, especially with the joke-alition we have “running” the country right now. It would surely be fantastic for Italy if China comes through with this idea though.

  • Wow China really charms Europe these days! As we all know European nations are dealing with economic crisis and judging solely this coming up with Chinese investment can really aid ailing nations in Europe no doubt about it.

  • The mysterious ways of China can be predicted as positive or negative. Apparently there can be positive signals. But while advancing ahead will China condition Italy to sanction something that would cost Italy? In the ordinery markets we can see the chinese markets are very convenient to visit to watch fantasy and cheap price. Things are elegant and you have a wide choice

  • China’s fiscal growth is really astonishing. She has emerged as the world’s economic leader by transforming hungry mouths to productive hands of a huge population. Their secret is discipline at all levels of their society.

  • China has played a great role in the economy though it has been ‘sleeping’ for quite sometime. Now that it is awake and growing fast in terms of economy, leaving other Asian countries behind, who knows what they can do? It is not surprising that a super powerful nation will be save by a less powerful one. Sometimes, the mighty has to acknowledge the strength of its subordinates in order to stand up again.

  • I think that china had a huge explosion into the market because what they do! An Asian man goes on vacation and in the boutique he could say: “Hey! I made this!” as far as other things for china to worry about, they do not have to physically advanced to make a stamp in the world.

  • I think that china had a huge explosion into the market because what they do! An Asian man goes on vacation and in the boutique he could say: “Hey! I made this!” as far as other things for china to worry about, they do not have to physically advanced to make a stamp in the world

  • Undoubtedly, China is an growing economic power now. And it is being more and more powerful.

    But “Will China going to the rescue?” I am still not quite sure with that. But I guess time will tell..
    ~and I hope when they are going to the rescue, it isn’t too late yet

  • Number 2 in the world ranking of GDP just after America, China is the only country other than India who can survive this onslaught. I don’t know of any other country who is not facing financial downturn other than this two giant country. Hope euro recovers for the world. dipping of Euro is a real bad sign for the years to come.

  • Everything has an exponential growth and decline. We are now seeing the decline of America and the growth of China. In This century, china is progressing very fast. Also we can see that all electronics manufacturing is being done in China no matter where the product is designed. This is really a great achievement of china.

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