There is great anticipation that China can play a major role in de-escalating the Euro crisis. With billion in foreign reserves, China can truly enter the big stage where international financial community can acknowledge its prowess.
However, there is political caution exercised by China by not committing itself to the cause of helping in the EuroZone affair. Although it is in China’s benefit for a stable Euro due to the “dollar trap” situation -almost $3,200 billion of foreign reserves are in dollar denomination, China can also understand that the current grim situation in the Eurozone has to do more with the compulsions of the political will rather than the monetary situation. Therefore it looks all China can offer at the moment is a symbolic gesture of help rather than substantive financial assistance.
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