Opportunity knocks for EU and China

Growing Chinese investments in Europe including the purchases of peripheral eurozone bonds contribute to sustaining the value of the euro and help to reassure the markets, particularly in these turbulent times. Such Chinese investment is welcomed by countries, such as Greece, Portugal, Spain and Italy, that are beset by worsening public finances.

This trend of Chinese economic activism presents both Beijing and the indebted European countries with the opportunity to further their bilateral relations, including the role that China can play in solving Europe's debt crisis, and the concessions that Europe will be willing to make.

The declarations of Chinese leaders in support of the eurozone are no novelty. Beijing has espoused the idea of a European common currency for many years. This is due to the importance of the European Union market for Chinese exports the EU is currently China's main trading partner and as part of China's desire to create an international currency system where the US dollar is less dominant.