China Courted on Global Stage as Europe Struggles

China's Economic Superpower Status

Country remains non-committal on request by Europe for financial backing

China, with its growing prominence on the global stage and its powerful purse strings, was front and center lapping up the limelight at the recent G-20 summit in Cannes, France, last week.

It was to China that the European bailout boss Klaus Regling traveled right after the decision was made at last week's emergency summit to triple Europe's safety net. He begged for a boost.

China's official response so far has been non-committal.

Hong Lei, China’s Foreign Ministry spokesman, said, "China consistently places importance on the Eurozone's development and has always believed the EU has the ability to resolve current difficulties."

Ask the man on the street, and he'll say it doesn't make sense for China -- with a $4,000-per-capita income, compared to Europe's 38,000 -- to help bail out the so-called First World.

"It's like a rich man who has wasted all his money coming to a poor man for help," said He Xingyuan, an unemployed migrant worker.

But China, with over $3 trillion in cash reserves, is in a position to buy more of Europe's debt.

If China eventually does pony up some sort of bailout funding, experts say, it won't be out of the goodness of its heart. Europe is China's biggest export market. If Europe's purchasing power diminishes, that will be bad for Beijing.

Bad, too, would be limits on political leverage that could result from Europe being beholden to China: Less ability in the West to influence China's human rights record and to press for a loosening up of China’s monetary policy, which keeps the renminbi artificially low and Chinese exports at an advantage.

Professor Aaron Friedberg of Princeton University and author of "A Contest for Supremacy: China, America and the Struggle for Mastery in Asia," doesn't worry as much about China's increasing economic power as he does about its unchecked military growth. He says Beijing has been expanding military expenditures by 10 to 15 percent for the past two decades.

Friedberg, while visiting the International Institute of Strategic Studies in London, told Fox News, "As China's power has grown, it’s been more willing to act in ways that are assertive and potentially challenging to others in the region."

Of particular concern to Friedberg is the South China Sea, which China has claims on. It’s thought that there are large oil and gas reserves at the bottom of the sea, and it is an important shipping lane, as well as a major source of fish.

Defense Secretary Leon Panetta traveled to Asia recently to pledge U.S. military commitment to the region, the sort of move we may see more of.

“The U.S. has to be able to do two things at once,” Friedberg said. “On the one hand, we have to continue to engage with China, as we have been doing. On the other hand, we have to take steps, as we also have been doing, to maintain a balance of power in the region that is favorable to our interests and to the interests of our friends and allies there.”

In the meantime, China, a nation of savers and massive reserves, remains in a position of prominence as Europe tries to solve its massive debt problem.