Eurozone crisis: 3 reasons why China might help bail out Europe

China is the world’s biggest creditor, with foreign exchange reserves of around $3.2 trillion. Europe would like Beijing to use some of that money to lend a hand and help bail out the eurozone.

3. It could mean currency opportunity for China

China is looking to diversify its foreign exchange holdings away from the US dollar, and lending to Europe would boost Beijing’s euro holdings.

If China was feeling particularly bold it could insist on lending in its own currency, the reminbi, which would nudge the currency a little closer to becoming an international one – and make borrowers bear exchange rate risks.

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