Wen Jiabao, the Chinese premier, arrived in Britain on Saturday to discuss economic issues with one of their largest European trade partners. This three day visit has drawn questions from close advisors on the significance that England, and even Europe has on a whole in the economic environment. In a weakened status, and with the perception of China’s growing economic dominance, and even its all but certain entry into the “market economy” status within a few years after just falling short in 2010, some have question why Jiabao should even spend his time giving Europe any attention.
On David Cameron’s visit to China last year, bilateral UK-China trade increased up to $100bn by 2015 were negotiated. With this, Europe is still China’s number one export market, giving China an interest in wishing Europe’s renewed success. Profit Maximizing Firm
While in Hungary, Mr Wen also pledged support for the euro. To do so he said that China will buy Hungarian government bonds and support the euro through Europe’s debt crisis. “China is a long term investor in Europe’s sovereign debt market,” he said at a press conference with Prime Minister, Viktor Orban. “In recent years we have increased by quite a big margin our holdings of government bonds. We will consistently continue to support Europe and the euro.” Profit Maximizing Firm
Seeing Europe’s success as a key part of China’s continued export market’s success, China has continued support of the euro.