China To Bailout Europe? EFSF Chief To Fly To China

Bloomberg reports that Klaus Regling, the chief executive officer of the European Financial Stability Facility, will be flying to China to meet investors (translation: beg for money). 

If you want to feel cheerful about that as a mean to save the Eurozone, think harder.

I have noted that if China does buy European bonds in vast quantity to save the Eurozone, the real reason is because that’s their trade and exchange policy.  That is mercantilistic and/or protectionistic.  Peripheral countries do not need a strong Euro, and China would be doing precisely that by buying European bonds in vast quantity.  That does not help these countries at all in terms of structural adjustment and deficit reduction.  But propping up the Euro would mean a relatively weak Chinese Yuan, which is kind of cool for China.

So, just forget it.

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About Zarathustra

Zarathustra: Founder and Managing Editor of Also sprach Analyst. Once an analyst, now an investor and entrepreneur. Based in Hong Kong, but Londoner at heart.