China looks for buy in on attempt to save global economy
China has sent a major trade delegation to Europe on a multibillion dollar buying mission, in the latest sign that China is taking a very different approach from Western countries in stimulating its economy.
The world's third largest economy and most prominent socialist state – is promoting free trade amidst the global financial crisis. Unlike western countries – struggling to support insolvent banks – China is boosting the real economy.
Another difference for Roland Nash, Managing Director at Renaissance Capital – China's stimulus comes from cash reserves – in contrast to the eye-watering debt run up by UK and US politicians.
“The difference between China and the U.S. is not so much the difference running up to the crisis as how they have dealt with the crisis. China has been the world's biggest saver and the U.S. has been the world's biggest borrower – Russia is also one of the world's largest savers, so it's been able to go out and spend some of those savings.”
Vladimir Osakovsky, Chief Economist, UniCredit Securities says China aims above all to defend domestic producers – who in turn help generate the country's huge currency surplus.
“It is important to note that the Chinese current account which gives this Yuan strong fundamental support, actually improves with falling commodity prices. This is a striking contrast to Russia, where most of our current account surplus was particularly based on high oil prices.”
Analysts say China is trying to be a force for stability – of business as usual – in an unstable global economy.