China has recently indicated that the western world must make more of an effort to recognize it as a market economy in order to receive additional aid in solving the debt crisis.
The warning comes as countries such as Spain, Greece, Italy and Portugal turn to Beijing as a potential debt buyer. China, currently the largest foreign creditor to the US, has reaped the benefits of significant economic growth and hopes to gain some additional international privileges as well. The Asian business giant has recently begun pressing the EU to recognize China as a full market economy under World Trade Organization rules, which would remove numerous restrictions for companies throughout the country.
“It would help the US and the Eu break away from their current financial woes should they ditch protectionist measures and sincerely open their arms to Chinese investments, allowing China to make the most of its rich foreign exchange reserves,” said Xinhua, the state-managed news service.
When China joined the WTO, it agreed to 15 years of non-market status. Chinese Premier Wen Jiabao stated last week that China has since reformed, and is now ready to have its status changed.
…But Not So Simple
Though China has dramatic leverage, the US told Beijing it must do more to open up its own economy in order to be accepted. “China’s current business climate is causing frustrations among foreign business and government leaders,” said Gary Locke, the US Ambassador to China. He added that currency trade should be less limited, and that intellectual property theft is still a major issue.