In contrast to the Obama administration’s economic plan-of-the-week, China’s moves are smart, strategic and integrated. While Geithner whines and threatens to levy sanctions, China is moving into Europe in a big way.
To begin with, the Chinese are investing in countries with downgraded government debt, sort of what bright private equity venture firms do stateside. They’re buying Greek debt, which, not incidentally, is guaranteed by Germany. And they’re buying it with U.S. dollars, which continue to lose value. The dollar has depreciated approximately 30% over the last five years and the Chinese fear justifiably that the decline will continue.
China now runs Greece’s main shipping port, which happens to be one of the largest European gateways for Chinese goods. And Prime Minister Wen is promoting a $4.5B credit line to troubled Greek ship-owners, to be used to purchase Chinese-made ships.
In those European countries lacking infrastructure, China is building highways and bridges. China outbid European companies to build a highway in Poland using a Chinese company and workers, with Euro-subsidies to boot.
In Italy, China is expanding the port of Naples, and a private Chinese company is negotiating to build a huge air terminal near Rome for cargo arriving from China.
All these investments are designed not only to facilitate the import of Chinese goods but also to vastly expand China’s presence in Europe. China should be a strong contender for future infrastructure projects on the continent. And Europe, which has surpassed the U.S. as China’s largest trading partner, is likely to support China at the World Trade Organization summit in South Korea next week.
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Amy H Laff is a StateBrief.com partner. A graduate of Univ of Penn and Stanford Law School, Amy practiced law and mediation on the east coast before relocating to the Valley, where she founded and chairs the AZ chapter of the Republican Jewish Coalition. Amy makes frequent media appearances, including AZ Law Channel and Tony Katz Radio Spectacular. Additionally, she works with companies and candidates on branding and communication. 
