"China willing to aid bailout: EU Leaders" This is the heading of the eye-catching article in the ChinaDaily.com on 28 Janaury 2012. Click here

It is at least conceivable that rather than an act of philanthropy, China would view this as a once-in-a-lifetime opportunity to enhance the nation's international image, prestigue, geopolitical and geo-economic influence.

While China would welcome and indeed make it a condition that other nations need to join in the rescue, it is apparent that no other country has financial resources big enough to match. So China is likely to be at least the primus inter pares.

Second, China could expect an understanding, if not a clear quid pro quo, that she would now be recognized as a full market economy. In any case, this would only be a few years ahead of the original target of 2015 as understood on China's first entry into the WTO. It is in any case curious that Russia, but not China, has long been recognized as a full market economy.

Third, China could also expect Europe to sell more European high technolgy to China (if not yet to lift the 21-year old arms embargo). This would help redress the trade balance with Europe (except Germany which already has a positive trade balance with China).

Fourth, China could take the opportunity of increasing the nations's share and hence voting rights in the IMF possibly to attain a veto power on par with the EU as a bloc or the US by itself.

Fifth, part of the rescue could take the form of currency swaps with individual Member States in need, including an understanding that the RMB (Chinese yuan) will be recognized for bilateral trade settlements. Like what has already happened with a number of other countries, this would help further boost the on-going internationalization of the RMB (the Chinese yuan).

Sixth, the rescue could accelerate China's ongoing efforts to construct a China-Europe high-speed rail network (initially for freight) which is designed to connect 17 European countries to China's eastern seaboard, including a possible Beijing-London link). This is slated to be the largest infrastructual project in human history. Click here Even before its completion, this gigantic project will spur European economic revival and open doors to much closer economic, trade, investment, and cultural exchanges with Europe.

Perhaps, with constructive thinking outside the box, the current European Crisis is too good to waste both for Europe, China, and indeed, the rest of the world.

Best regards,

Andrew