China Power

Panned in Cannes?

G-20 leaders are meeting this week in Cannes. Europe’s economic crisis is expected to be high on the agenda.

Sometimes an event manages to symbolize, for better or worse, a particular moment in time. This week’s G-20 summit is a good example.

For a start, it’s being held in the French resort of Cannes, known as a playground for the rich at a time when many fear the world is teetering on the edge of another recession. Today, the International Labour Organization warned that the world is on the brink of a new and deeper jobs recession, and that it could take 5 years before employment levels return to pre-crisis numbers.

‘We have reached the moment of truth. We have a brief window of opportunity to avoid a major double-dip in employment,’ said Raymond Torres, director of the organization’s International Institute for Labour Studies. The report also noted that the risk of social unrest is rising in 45 of the 118 countries it considered. As Occupy Wall Street-inspired protesters make their case around the world, a meeting in usually sunny and luxurious Cannes is perhaps something of a PR hiccup for global leaders.

But there’s another interesting bit of symbolism – European leaders are looking to China to help them tackle the ongoing crisis in the Eurozone. It’s a reflection of the much commented on shift toward the Asian Century.

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Late last week, French President Nicolas Sarkozy announced he intended to call Chinese President Hu Jintao to discuss the possibility of China supporting the European Financial Stability Facility. The suggestion drew sharp criticism from France’s opposition Socialists.

‘It’s shocking,’ said Martine Aubry in comments published Sunday, Reuters noted. ‘By turning to the Chinese the Europeans are showing they are weak. The response should have been European.’

Of course, there are a whole host of reasons in this whole mess why China might consider Europe weak, so it seems a little unfair of the opposition to single out Sarkozy’s overtures. The interesting question now, of course, is how much of a role China wants to play.

A commentary piece by China’s official Xinhua news agency yesterday suggests there’s little appetite in Beijing for significant intervention.

‘(A)mid such an unprecedented crisis in Europe, China can neither take up the role as a savior to the Europeans, nor provide a “cure” for the European malaise,’ Xinhua argued. ‘Obviously, it is up to the European countries themselves to tackle their financial problems. But China can do within its capacity to help as a friend.’

The commentary also had some sharp words for those that have suggested any Chinese assistance would come with strings attached (arms sales restrictions and criticism over China’s undervalued currency being two possible areas where China could secure some diplomatic leverage).

‘(S)ome Westerners failed to fully understand China’s good intention, asserting that the world's second largest economy would take advantage of the European crisis for its own agenda. Some even went further to drum up trade protectionism.

‘Actually, a prosperous and stable Europe is important to China's stability and development, as their economies are closely linked.’