China should take precautions in case Greece comes out of the euro
China should take “precautions” to a possible departure from Greece in the euro area after the elections in this country next Sunday, said today’s economic experts and analysts Communist government, according to the official Xinhua news agency.
The uncertainty in the Member States of the European Union (EU) extended this Friday at the Asian power, and Xinhua said today possible “turbulence” in global financial markets and alerted the consequent damage and growth in exports from China.
However, the European Commission on Friday again denied rumors that he is preparing an alleged plan to exit from the eurozone and Greece reaffirmed their desire that the country continues with the euro.
But the second largest economy, which holds the EU as its main trading partner is waiting for what happens in the Mediterranean country, and fear its negative impact on Chinese growth, which reached its lowest in three years the first quarter of 2012 to rise by 7%.
Ba Shusong, an economist of the State Council Development Research and Chinese, Xinhua said that “this scenario (the withdrawal from Greece in the euro area), and especially its impact on employment would be undesirable for the Chinese government.”
Greece will live a crucial elections Sunday, in which the Conservatives promise to renegotiate the rigors of European financial rescue plan, without making clear whether the country should remain in the euro, and the radical left tries to dispel rumors about the departure of the Eurozone if they win the elections.
In China, Xinhua refers to the electoral dispute and highlights the “fear of global investors that the leftist coalition win” and “take down” rescue “Greece has kept afloat since 2010.”
For Ba, the European crisis was a “great cause” of the relaxation of growth in China by reducing external demands, and an output of the euro in Greece “would make the situation worse.”
The expert urged the authorities to “follow closely developments in Europe and economic policy adjustments based on changes.”
“China should reduce its assets in peripheral countries of the eurozone if Greece goes to a gradual exit from the euro,” he suggested.
Yu Yongding, former adviser to the Chinese Central Bank, added that this entity “should consider measures” such as capital controls and the provision of contingency funds to offset the impact of a possible withdrawal of Greece.
Beijing takes several months to promote domestic demand, given the volatility of the foreign market and the consequent decline in foreign trade, which occurred last Saturday an annual increase of 14.1%, considerably lower than the increase from 22.5% last years.
China’s economy has been slowing its pace of growth since early last year after a 2009 and a 2010 set by state policy stimulus against the global financial crisis.
Category: Money
