February 14th, 2012
07:46 AM GMT
(Hong Kong) – Could it be a coincidence that diplomats chose to schedule an annual meeting of Chinese and EU leaders on Valentine’s Day?
On Tuesday, two of the EU’s biggest hitters, Herman Van Rompuy, president of the European Council, and José Manuel Barroso, president of the European Commission, will meet with Premier Wen Jiabao in Beijing, before separate meetings with President Hu Jintao and Vice-Premier Li Keqiang.
It’s unlikely they’ll be carrying flowers and chocolates in an effort to warm the hearts of their hosts, but the sentiment will be there nonetheless.
The European Union needs a financial lifeline and China has the reserves to throw it.
On the eve of the talks, Herman Van Rompuy was asked by China Daily whether China could “save” the euro area from its sovereign debt crisis.
His coy response was “of course, we appreciate the confidence China has always demonstrated towards Europe and the euro.”
He added: “The euro is the world's second reserve currency and therefore, there is no doubt that the stability of the euro area is important for the world economy.” End of answer.
According to figures released by Eurostat on the eve of the meeting, China was the EU’s second biggest trading partner after the U.S in the first 10 months of 2011.
Exports from the EU’s 27 member states to China grew 21% over the period to 112 billion euros while imports rose just 5%. Combined, the two worked to push the trade deficit between Europe and China down to 132 billion euros.
Europe needs China’s business, just as China needs Europe to be solvent enough to push through orders to its factory floors.
Just last week, the International Monetary Fund warned that China’s growth could halve this year if the eurozone debt crisis tipped the global economy into recession.
“The risks to China from Europe are both large and tangible,” it said, warning that a recession could cut China's anticipated growth in 2012 from 8.2% to 4.2%.
Combined, Europe and China represent a staggering 1.8 billion people.
The countries leaders plan to launch a new brand at Tuesday’s talks called “High Level People to People Dialogue.”
Van Rompuy says it is aimed at “improving the interaction between our citizens.”
Those 1.8 billion citizens will be hoping their leaders interact enough to ensure their financial future is improved as well.
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