Publication

This paper provides an overview of China’s strategic behavior towards the European Monetary Union (EMU). The authors present five reasons for China’s longstanding support for the Euro: 1) its need to reduce its over-dependence on the dollar; 2) its accumulation of over US1$ trillion worth of Euros in a bid to maintain diversification; 3) the grave importance of the European market for China’s development; 4) the country's use of financial support to strengthen its strategic leverage in Europe; and 5) China preference for a multipolar world order in which the Euro counterbalances US hegemony.