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Lagarde speaks in China, warns of a 'lost decade'

IMF Managing Director Christine Lagarde gestures as she addresses a press conference during the second day of the G20 Summit on November 4, 2011 in Cannes, France.

Steve Chiotakis: The head of the International Monetary Fund, Christine Lagarde, is in Beijing today asking the Chinese government to step in and do some buying of European debt -- and so many others will probably shy away.

Marketplace China bureau chief Rob Schmitz reports.


Rob Schmitz: While the developed world is down in the dumps, China's economy continues to shine -- which might explain Lagarde's gloomy speech today in front of her Chinese counterparts.

Christine Lagarde: We believe that the world economy has entered a dangerous and uncertain phase.

Lagarde said the global economy is on the verge of a lost decade. She even set up an account on China's version of Twitter to spread her message.

Arthur Kroeber: It's possible that Lagarde is engaging in some gamesmanship to try and get the Chinese to up the ante a little bit.

Beijing economist Arthur Kroeber says Lagarde will have to do her best to show the Chinese that the eurozone crisis is a crisis for China, too.

Kroeber: That's purely a question of how persuasive she is about the scale of the problem and to what extent the Chinese believe their economy runs on a different track.

So why should Beijing bail out Europe when European banks are running away? Exports, says Kroeber. China still sells more exports to the E.U. than any other market.

In Shanghai, I'm Rob Schmitz, for Marketplace.

About the author

Rob Schmitz is Marketplace’s China correspondent in Shanghai.

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