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The Chinese people are making it known to their government, online and elsewhere, that the PRC had best help its own people before even considering assistance for Europe. European leaders have asked China to contribute money to the European Financial Stability Facility to increase the fund’s capacity but the PRC has so far given this idea a cautious response, replying that the situation with regard to Greece needed to be stabilized before moving forward. This comes during the G20 meeting in France. The domestic pressure on the Chinese government to maintain economic growth, ease unemployment and help lower the prices of commodity goods is immense. Given its massive population of 1.3 billion and its $3.2 trillion in foreign reserves, China’s future trajectory is more determined by the disparity between its peoples than it is its current account balance. While $3.2 trillion is a mighty sum, China’s population is overwhelmingly poor and the recent economic crises around the world have had deleterious effects on the economy there. Though China is rapidly developing, it is still developing, and from a domestic standpoint, bailing out the European economies, especially when you have Greece on the line, does not make rational sense and may not be the best investment in the long run. Chinese President Hu Jintao is also reluctant to risk his political fortunes on a European gamble ahead of the Chinese Communist Party’s 18th Congress where a leadership shuffle is expect to take place.

[Reuters]

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