LONDON - China's increasing financial involvement in debt-ridden European
nations has divided observers, inviting comparisons on one side to a Chinese
Marshall Plan for Europe, and to a Chinese communist takeover of the continent
on the other.
During his week-long tour of European capitals, Premier Wen Jiabao spearheaded
an intensive Chinese diplomacy seeking to win skeptics and defuse fears of
Beijing's growing international clout.
On his stops in Greece, Belgium, Italy and Turkey, he held talks about
bolstering market access for Chinese companies into Europe, signed investment
deals and talked long-term action plans for China presence in European
countries. The message
delivered was unequivocally that China is now an important player on the
European financial and economic arena.
Veronique Salze-Lozac'h at the Asia Foundation compared China's "rescue plan"
for struggling European economies to the Marshall Plan of the 1940s, saying it
marked a turning point in recognizing China as a key world player.
"Like the Marshall Plan in its time, China's offer to help Greece is not about
altruistic solidarity, and is far from selfless philanthropy," she wrote in a
report last week. She said it amounted to "a clever and enlightened economic
and financial strategy".
On his very first stop in Athens, Wen pledged renewed commitment to Europe's
financial stability and described the European Union and China as "passengers
in the same boat".
"We hope that by intensifying cooperation with you, we can be of some help in
your endeavor to tide over difficulties at an early date," Wen said in a speech
to the Greek parliament. "China will not reduce its euro-bond holdings and
China supports a stable euro."
Wen Jiabao offered to buy more Greek government bonds when Greece returns to
borrowing on the international debt markets. He also proposed to set up a US$5
billion fund to support the upgrading of Greece's merchant fleet with
Chinese-made ships, and pledged to support more Chinese investments in the
This comes on top of existing agreements to lease and operate the country's
main port for 35 years and to build a logistics terminal to connect with
southeastern Europe. As Greece is preparing to sell off state assets to raise
much-needed cash, China is discussing further investments in the country's
railways, telecom and construction sectors.
Beijing's foray into Greece has raised hackles, with some observers reviving
the phantom of a China threat.
"It was Winston Churchill and Harry Truman who took steps to prevent a
communist takeover of Greece; it is Wen Jiabao who now makes the running by
promising to buy Greek bonds when they are once again offered on world markets
and to help that bankrupt nation's recovery with investments in its economy,"
Irwin Stelzer, director of economic policy studies at the Hudson Institute
wrote in the Sunday Times in Britain.
Greece is hardly the only European country where officials are looking at China
as the possible underwriter of their countries' economic recovery. Earlier this
year, Beijing bought 400 million euros (US$558 million) of Spanish government
debt. Portugal and Ireland, both threatened with debilitating debt or bailout
costs, are also said to be courting Chinese lending.
By wooing individual indebted European countries, China is seen by some as
implementing a "divide and rule" strategy in Europe where talk about
coordinating a new united EU policy on dealing with the economic giant has so
far failed to produce a coherent policy framework.
The Chinese "complain that it is too difficult to deal with Europe that speaks
with so many different voices but in fact they have managed to use this to
their own advantage, playing different members off one another," said one EU
official based in Brussels.
Chinese experts say Europe has the same reasons for deepening relations with
China as Beijing.
"For Europe, China is a bargaining chip that increases its clout versus the
US," says Zhang Guoqing, pubic policy researcher with the School of Government
at Beijing University. "Europe is clear that while some people in Washington
are preparing to wage a trade war with China, this is their opportunity to
boost trade and investment from China."
Zhou Hong, director of the Institute of European Studies at the Chinese Academy
of Social Sciences, says China meant well in Europe but acted rashly.
Beijing acted "without thinking through the reactions from the European side",
she said in an e-mailed comment. Before rushing into these investments, China
should have consulted Brussels, mindful that such Chinese investments may be
regarded as "an intrusion into the European rules of the game".
But China is "almost always condemned whether it does something or if it does
not", says Duncan Freeman, researcher with the Brussels Institute of
Contemporary China Studies. Whether seen as a Chinese Marshall Plan or as a
communist takeover, both are an exaggeration of what China has done in Greece
and of the effects its investments will have in the country, he asserts.
"It is not China but the European Union and the IMF [International Monetary
Fund] that hold the real power of making and breaking Greece," Freeman says.