Print Version    Email to Friend
Chinese press compares euro debt crisis with Black Death

BEIJING (AsiaNews): The People’s Daily reported on August 22 that Europe’s deadly debt crisis will harm the economy in China.

 The top newspaper of the Communist Party is blaming western democracy for the crisis, while claiming that China’s own financial success is due to its political and economic model.

“The sovereign debt crisis has spread like the Black Death of the 14th century across the euro zone countries,” the article, signed by Zhang Zhixiang, a former head of the international department of the People’s Bank of China, and Zhang Chao, an economist for the China Development Bank, says.

The article adds that the euro is not as important to China’s economy as the US dollar, but notes that prime minister, Wen Jiabao, expressed confidence that debt-laden European countries can overcome their problems.

During a visit to Germany in June, Wen said China could buy the sovereign debt of some troubled euro zone nations if needed.

“The euro zone should reform the institutional constraints to economic development, and show a responsible attitude regarding the links between their countries’ and their region’s economic development and global economic and financial stability,” the People’s Daily says.

The piece was published only days before French president, Nicolas Sarkozy, was due to meet his Chinese counterpart, Hu Jintao, in Beijing.

However, AsiaNes notes that on August 21 the China Construction Bank reported record profits for the first half of the year based on higher demand for loans, a sign that instructions to cool the credit boom have not been heeded.

“The focus going forward is credit quality instead of credit growth,” said Wilson Li, a Shenzhen-based economist, because an economic downturn will inevitably increase the number of bad loans.

More from this section