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CCTV News: China’s Bailout of the EU

January 6, 2011

I was on CCTV News BizAsia this morning, talking about the visit by Chinese Vice Premier Li Keqiang — who is expected to take over the China’s #2 leadership position after 2012 — to Spain, Germany, and Britain.  In particular, we talked about the significance of China’s pledge to buy Spanish sovereign bonds, as well as the trade and investment deals signed during the trip.  I also talk about some of the main areas of agreement and disagreement that are likely to dominate Li’s visit to Germany, later this week.

You can watch a short clip of the interview here.  The questions I was asked include:

1.Chinese Vice Premier Li Keqiang is in Europe for his official visit. He says China is willing to buy more Spanish government bonds to help the country deal with market concerns about its solvency. So to what extent can China help Europe fight its debt crisis?

2.China and Spain have sealed 7.5 billion dollars in trade deals. What impact will these agreements have on both sides’ economic development?

3.The Chinese Vice Premier is also set to visit Germany and Britain. What are we likely to see from those visits? In which fields can China and European countries improve cooperation?

I was also on Dialogue Tuesday night, talking about the challenges to US-China relations in light of US Secretary of Defense Robert Gates’ visit to Beijing this week, as well as President Hu Jintao’s official state visit to Washington later this month.  We discussed the communications gap and strategic distrust that exists between the two country’s militaries, as well as some of the main areas of economic disagreement and whether they can be resolved.  You can watch that show here.

One Comment leave one →
  1. Tim Teng permalink
    January 9, 2011 11:08 am

    Why does China keep buying US debt, and now Spanish debt as well, knowing it may never get its money back? Then I took out a dollar bill and stare at it, and it dawn on me: it is a FIAT money backed by nothing other than credibility of our Federal Reserve Bank.

    Now thinking in that light, what if China, 20-30yrs from now, becomes more ‘credible’ in world’s view- Does it mean it matters less whether the US (or Spain, or any PIIG countries) repay China in full, the FIAT money that counts is the YUAN bill- which means China’s own reserve bank can circulate as much as it sees fit- if so, it really matters not whether US/PIIG repay or not at all. The money, USD and Euro denominated, China now plowing into US/PIIG debt is to buy that ’20-30yrs stability’ for continual China development

    Not a bad investment at all, if it works.

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