Europe and China

The BBC has an insightful article by Ian Morris, a Stanford University historian, on the reversal of roles between Europe and China in the past century.

In October 1911, China rose up in revolution. Four months later the last emperor had fallen and European moneymen were flocking to Beijing, eager to finance the bankrupt new republic.

In October 2011, another European moneyman headed for Beijing. But Klaus Regling, head of the European Financial Stability Facility, did not go there to lend to China. He was there to borrow, asking China to save Europe from economic disaster.

Morris ends his article by suggesting that Europe should avoid the mistake the Chinese made a century ago by not taking loans from China to finance its debts. But the most revealing part of his article was a quote from Jin Liqun, the supervising chairman of China's sovereign wealth fund. He quotes Liqun as saying:

"If you look at the troubles which happened in European countries, this is purely because of the accumulated troubles of the worn out welfare society... The labour laws induce sloth, indolence, rather than hard working."

Now, if this is not a wake up call for Europe, I do not know what is. I just hope that America will learn from the mistakes of the Europeans and move quickly to downsize the welfare state!