Beijing is increasingly concerned about the European debt crisis and has been bracing for its impact even as sovereign wealth fund China Investment Corporation reduces its holdings of European bonds and stocks.
Ratings agency Moody's said the credit ratings of all EU member countries will be reviewed and even nations which have performed well may lose their AAA ratings if Greece leaves the eurozone. A rising unemployment rate and other indicators show Europe has fallen into second recession, said Nobel prize-winning American economist Paul Krugman. The upcoming election in Greece and the G20 summit in Mexico are likely to further increase the tension in the market, he added.
Chinese government departments such as the National Development and Reform Commission, the People's Bank of China, the banking regulatory commission, foreign exchange administration and Ministry of Commerce have reportedly convened to plan measures such as stabilizing the renminbi's exchange rate and stepping up monitoring of cross-border capital flow in the event of Greece's withdrawal.
Officials have also lowered their expectations regarding China's economic growth with demand from Europe weakening and protectionism on the rise. "We can keep our trade growth around 10% if we are lucky," said the country's commerce minister, Chen Deming.
The EU has been paying close attention of late to trade friction in sectors such as emerging industries and telecommunications, saying it may follow the United States in launching antidumping and antisubsidy investigations on solar products imported from China. Telecom equipment makers such as Huawei and ZTE may become the next target of investigations, said Li Chenggang, head of the law and treaty department of the Chinese commerce ministry.