Europeans are asking Beijing to invest in their economy and the euro, even as China seeks to cool its own burgeoning growth rates. Some may see a triumph in this, that China is the big winner in the ongoing crisis.
When problems in Greece began to crystallise last year, one of their first efforts was to seek assistance from Beijing. Recently, Spain, another economy under scrutiny, issued a 10-year bond and allocated some US$500 million ($700 million) to China. Even the Chancellor of euro-giant Germany Angela Merkel was reassured during a state visit that the Chinese would continue to back the euro and hold European assets.
Some see Europe depending on China as a sign that the latter continues to grow in global stature, payback for its past humiliation by colonial powers. I see instead an unequal, hot-cold global economy that can cause problems.
Problems in the euro-zone loom large and will likely be protracted. Surveys show young Europeans do not expect a future that is better than their parents'. Vising Brussels last week, even amid a heat wave and the all-European World Cup Final, the economic cold could be felt.
By contrast, the Chinese economy is hot, growing at more than 10 per cent, and it is not alone. The Asian Development Bank predicts Asia, excluding Japan, will grow 7.5 per cent this year. For Singapore, after the depths of last year, the first half rebound was spectacular at 19.3 per cent. Undergrads are again becoming picky in their choice of employer and government bonuses for civil servants will resume.
Yet, this hot-cold contrast with Europe does not mean Asia has emerged triumphant from the crisis. Problems in Europe can affect Asia in the future. Greece is not really the problem.
The core of Europe is affected too. The United Kingdom is reining in government debt. Next year, expect Germany - Europe's largest economy and the ultimate guarantor of the Euro and Greek bailout - to also start serious tightening.
This will touch Asia. About 10 per cent of Asian products goes into Europe - mostly Germany and the key economies - and Europe is a major trader and investor.
TOO GOOD TO BE TRUE?
For Asia, the current figures may be too good. China shows signs of over heating. Beijing is struggling to prevent asset bubbles but too much credit tightening could lead to collapse. Events in their housing market will be anxiously watched.
For Singapore, the numbers rise steeply from the lows of last year. Some sectors are driven by restocking inventory and could be temporary one-off factors, rather than indicators of a broad and sustained recovery.
The euro depreciation bears attention. It has already come down some 17 per cent compared to the yuan. German exports in recent months have soared on the back of Chinese demand. Asian consumers too will find European holidays and luxury goods cheaper. Europeans are tightening their belts to cut government spending, while hoping that selling to China and elsewhere can keep their factories busy.
The hot-cold economies will seek to rebalance themselves. The process, however, can neither be simple nor without consequences. Reacting to domestic circumstances, each region may take action that could have untoward results for others.
Asia must hope that Europeans are not entirely inward looking and pre-occupied. The way Europeans have turned to China is not, in this sense, a bad sign. But it would be best that others in Asia are also engaged.
In this engagement, equality and mutual respect in the relationship must follow. The historical European sense of superiority must be put aside and any growing sense of Asian triumphalism resisted.
The contrast between the hot-cold economies reminds me of the three bears in Goldilocks. Two bowls of porridge, like today's economy, were too hot or too cold. Only the last bowl was just right. This is not easy to emulate in the global economy. If we can't get it right, the danger is we alternately burn, freeze and then live with the tepid.