Since the crisis started, far too many politicians have looked for easy solutions like lower interest rates rather than restructuring economies to rebuild confidence and create job opportunities. Buying Italian bonds will not save Europe. It will only avert a crisis until a few months down the line when fears about Spain or Portugal hit the world.
Even though Prime Minister Wen Jiabao said China would be a friend to Europe, he did not specifically mention what his nation would do. Wen’s options are limited because of raging inflation that hit 6.2 percent in August, rising local government debt and non-performing loans. Domestic pressure is also pushing the government to be cautious in buying bonds. The Chinese people don’t want to see the nation’s reserves drop in value if the Euro falls just as China’s U.S. dollar holdings have lost value…
China is being a responsible global stakeholder by stepping in to calm markets and ensure the fiscal viability of its own nation. It is taking care of its internal interests and helping where it can globally. But the Chinese know that buying bonds is not a long-term solution. Western Europe and America need to focus on reforming their economies to produce items the Chinese want. They need to build consumer confidence through job creation and stop dreaming that a Chinese bailout will work.
- Jobs in China? Not that easy – Shaun Rein (chinaherald.net)
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- China tied by debt and inflation – Shaun Rein (chinaherald.net)
- Poor health care and education cause rich to emigrate – Shaun Rein (chinaspeakersbureau.info)
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