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European Debt Crisis

German leader Merkel seeks support from China

Rob Schmitz Feb 2, 2012

Tess Vigeland: German Chancellor Angela Merkel is in China all this week. She’s plugging German exports and telling Chinese leaders how the European Union will tackle its debt crisis.

The EU wants China to contribute to the bailout fund. Today, Premier Wen Jiabao said his country is considering greater involvement. But that’s generating some skepticism. Our China correspondent Rob Schmitz has more.

Rob Schmitz: A spokesperson for Merkel says the German leader will seek to rebuild confidence in efforts to stabilize the situation in the EU.

Andrew Batson heads China research at Dragonomics in Beijing. He says the Chinese have been puzzled why it’s taken EU leaders 16 emergency summits to try and tackle the debt problem.

Andrew Batson: I mean, there have been a lot of summits and agreements and promises, and frankly, it’s really difficult to keep track of all the things that are supposed to be happening.

The Chinese, says Batson, are eager for the details.

Zha Daojiong is a professor of international relations at Peking University.

Zha Daojiong: I would very much doubt that this would be a time for a very solid Chinese promise to say ‘yes, here is that amount of money you requested from our foreign exchange reserve just for the sake of stabilizing the euro.’ Because we have a lot of domestic needs for that money as well.

After the 2008 economic crisis, China spent half a trillion dollars on a domestic stimulus package to help jumpstart the global economy. Zha says a lot of China’s current economic problems stem from how poorly that money was spent. The Chinese will politely nod and smile during Merkel’s trip this week. They won’t be digging into their pockets.

In Shanghai, I’m Rob Schmitz for Marketplace.

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