Wen Jiabao, Chinese premier, has called on debt-laden European countries to put their “own houses in order” before asking China for a bail-out, in a sign of Beijing’s reluctance to be cast as saviour of the global economy.
Speaking at the World Economic Forum in Dalian, China, Mr Wen publicly linked Chinese investments for the first time with long-standing political demands, indicating a possible hardening of Beijing’s position towards crisis-hit Europe. “Developed countries must undertake responsible fiscal and monetary policies,” he said. “What is most important now is to prevent further spread of the sovereign debt crisis in Europe.”
The debt woes of peripheral European countries such as Greece, Portugal and Ireland have spread in recent months to the larger economies of Spain and Italy, leading many to question whether the single European currency will survive in its current form. The markets suggest a default by Greece is inevitable and the continent could easily slip back into recession.