It is only 12 years old since the euro generated in 1999, but it has quickly become the secondlargest international

monetary next to dollars. The financial crisis originating from the United States has provided opportunities for euro with further improve status. With the way of the euro the is stronging, the asset of $euro euro is very hot. At euro 10 years old, the challenge between euro and dollar is still reverberating. However, the good momentum is ended by Greek debt crisis. In 2009, countries are still worrying about the subprime crisis hit bottom after the global economy. In 2010, countries are concerned about global deficit problem. From dubai to Greece, from Greece to the euro zone, from Britain to the United States, the huge deficits of developed economies is eroding the global economy.At present, Chinas economic rebound is strong, the national debt and deficit is far below the internationally recognized risk tipping point, but there are also some local government debt and deficits in the development of blind phenomenon. And, Chinas economy has already gradually been into the world of economic globalization, the world economy changes are appearent through the development of Chinas economy and changes. Therefore, paying close attention to the trend of the European debt crisis, positively studying related countermeasures, has very important practical significance.Based on the analysis of the evolution process of the European debt crisis, according to propose, starting to analyze and solve the problem to arrange the essays structure, which can be divided into five chapters: the first chapter is the introduction section, mainly introducing the background and significance of the topic, literature review, research methods and innovative points; The second chapter mainly analysis the European debt crisis; and the deep reason Chapter 3 is from the eu, global economy, Chinas export discussing all the influence of European debts; The fourth chapter try to analyze developed European countries debt crisis and the Latin American debt crisis in developing countries, the deep understanding behind two crises structural problems and profound reasons; Chapter 5 combining debt crisis lessons, put forward some beneficial to Chinas economic health and the enlightenment of stable. INTRODUCTION
Because the end of globe war II, europe has been a good ever growing connections among European Countries. Starting as a detailed economic and politics relationship among Portugal, Germany, Belgium, Italy and also the Netherlands, eventually increasingly more countries joined the actual emerging EU till it became the actual 27 countries organization we all know it to end up being today. It is just 12 years old because the euro generated within 1999, but it's quickly become the actual second-largest international monetary alongside dollars. The financial turmoil originating from america has provided possibilities for euro along with further improve standing. In the immediate aftermath from the financial meltdown within 2008, the global turmoil has made an essential shift. By after that not the personal banking sector, from in which the financial crisis initially emerged from, but sovereign states face the danger of default. Financial stability dangers have increased substantially in the last two years because of the burst of the actual so-called European sovereign-debt crisis this year. In such a way that for the very first time since October 08, the risks in order to global financial balance have increased1. So much to ensure that some economists don't believe the eurozone can survive as pressures appear to increase and spread almost every other day. For example, early in 2012 the actual famous economist Nouriel Roubini warned how the eurozone will collapse inside the year..

Crisis origin

Europe have participated within borrowing of funds in the international communities. The borrowed funds have been in turn used in order to curb the governments finances and finances which have deteriorated through the years. From this, there's been a registered economic crisis due to overutilization associated with public expenditures to supply financial stability as well as stimulus in each international and Western financial markets. European sovereign debt crisis can also be asserted to have descends from easily accessible credit score funds. This brought more than reliance on credit funds to satisfy the domestic turmoil. European Union has additionally participated in many agreements which resulted in commercial and monetary interdependence. This created susceptability of European economic dependence bringing on subsequent effect within Europe when monetary partners are worst hit through the crisis. The surges associated with crisis in European countries have propelled an establishment of numerous pacts to make sure strict budget discipline to be able to erase monetary dangers and encourage monetary stability in Western economy..

China's Role in the Debt Crisis

Europe have participated within borrowing of funds in the international communities. The borrowed funds have been in turn used in order to curb the governments finances and finances which have deteriorated through the years. From this, there's been a registered economic crisis due to overutilization associated with public expenditures to supply financial stability as well as stimulus in each international and Western financial markets. European sovereign debt crisis can also be asserted to have descends from easily accessible credit score funds. This brought more than reliance on credit funds to satisfy the domestic turmoil. In recent years, largely due to some cheap labor pressure, China has bypassed Asia and emerged since the strongest economy on the planet. It provides products for countries worldwide. After years associated with Canada enjoying a powerful trade relationship with america, China overtook Canada when it comes to imports in the actual U. S within 2008. Furthermore, possibly the other most substantial economy, the German born, has become the biggest importer of Chinese goods on the planet. Amidst the continuing debt crisis using European nations, China has mentioned through Premier Wen Jiabao that the reclassification of China from the nonmarket to an industry economy will prompt action in the country when it comes to helping the Western nations. Despite taking pleasure in such economic as well as trade dominance, China is nevertheless not considered through the World Trade Business (WTO) to become a market economy. China is classified like a nonmarket economy. Which means that the country offers many restrictions imposed onto it by tariffs as well as trade laws. For instance, many goods which are manufactured in The far east are taxed seriously upon sale within the EU because of the fact that if these tariffs weren't imposed, the price from the goods would end up being exorbitantly cheap. (Bradsher, 2011) The cost would be underneath the normal value from the good, which legally speaking is how much money it takes in order to manufacture and market the merchandise. Furthermore, Chinese manufactured goods could be sold in line with the price for all of them in China which may be extremely low because of the weak state associated with Chinese currency. Those opposed in order to China reaching marketplace economy status are quick to indicate the ramifications of this type of scenario. In The far east, many large

companies work closely using the government. The federal government provides such advantages as discounts upon land, subsidization and low interest on loans.

Chinas interests in supporting the EU

Europe have participated within borrowing of funds in the international communities. The borrowed funds have been in turn used in order to curb the governments finances and finances which have deteriorated through the years. From this, there's been a registered economic crisis due to overutilization associated with public expenditures to supply financial stability as well as stimulus in each international and Western financial markets. European sovereign debt crisis can also be asserted to have descends from easily accessible credit score funds. This brought more than reliance on credit funds to satisfy the domestic turmoil. In our strategy, China has numerous causes of decreasing the possibility of deepening the Eurozones sovereign financial debt crisis further. Near the economic issues you will find notable political causes too. Economic causes could be assorted in 3 major groups that are related to industry, investment positions in addition to currency policy and foreign currency reserves..

4.1.1 Trade
Europe have participated within borrowing of funds in the international communities. The borrowed funds have been in turn used in order to curb the governments finances and finances which have deteriorated through the years. From this, there's been a registered economic crisis due to overutilization associated with public expenditures to supply financial stability as well as stimulus in each international and Western financial markets. European sovereign debt crisis can also be asserted to have descends from easily accessible credit score funds. This brought more than reliance on credit funds to satisfy the domestic turmoil. In our strategy, China has numerous causes of decreasing the possibility of deepening the Eurozones sovereign financial debt crisis further. Near the economic issues you will find notable political causes too. Economic causes could be assorted in 3 major groups that are related to industry, investment As we now have argued before, trade relations between China and also the EU have turn out to be very intense. Chinas number 1 merchandise export market may be the EU. The 28 countries absorb around 20 per cent associated with Chinese commodity export (based on the WTO (2012), this particular rate was nineteen. 7 per penny in 2010, amounting in order to nearly 311 million dollar). Within principle, the Eurozones sovereign financial debt crisis may result in decreasing demand with regard to Chinese products, that obviously damages the actual Asian export-based economic climate. Notwithstanding, there are a few researchers who don't agree with this particular statement. For instance, Mei (2011) claims how the European demand with regard to Chinas exports won't decline so long as the EUs large economies (Italia, Germany, France and Britain) don't collapse. 3 In addition, he highlights the very fact that China comes with an enormous domestic market which has the capacity to counteract the contraction associated with its export marketplaces. Nevertheless, China being an export-oriented country getting the EU as it's large exportpartner

may are afflicted by the decreasing Western demand, therefore the actual Asian country offers great interest in order to help the Europe recover. In add-on, the depreciation from the euro may worsen the situation since it decreases the Chinese language exporters income. But alleviate this problem the truth that statistics show which 80 percent associated with China's foreign industry is settled within dollars, including its exports towards the Eurozone (Mei, 2011). Which means that the euros devaluation against US buck affects Chinese investors less seriously

4.1.2 Investments
The worthiness of the Western direct investments within China is considerable and recently the EUs reveal in Chinas complete FDI has elevated (Ali as well as Guo, 2005). However the deepening EU turmoil can generate the drop in Western investments in China within the following years (Determine 5). Qingfen (2011) emphasizes how the EUs cut associated with investment in The far east by 378 zillion dollars in September 2011 is strictly attached to the debt turmoil. Indeed, Mei (2011) information a dual influence from the Eurozones crisis in this instance. He believes how the European investments may decline in China due to the recession, yet other investors risk turning towards China escaping in the contraction of their own domestic markets. Leastways, complete FDI inflow within China decreased through 2008 to 2009 and even though it increased later on, it has not really reached the 2008 level this year, yet (UNCTAD, 2012). This suggests how the EU still remains an essential FDI-donor for China.

Figure 5: EUs FDI flows from and to China, 2007-2010 (billions of euros) Source: Eurostat (2012)
However, China has opportunities in Europe as well. Although the amount of these investments tend to be much smaller compared to European FDI within China but they likewise have reached considerable quantity, especially in modern times (Zhimin as well as Armstrong, 2010). The far east has trusted within Europes economic prosperity and Chinese investments within the EU have already been increasing continually because the crisis broke away (Figure 5). Hence the EU became the 2nd biggest destination with regard to Chinese outward FDI at the rear of Hong Kong (Zhimin as well as Armstrong, 2010). China might have large losses when the euro depreciated resulting less worth from the Chinese investments. Therefore it serves as an essential reason why China must support the Eurozone also it to keep the worthiness of the dinar.

4.1.3 Currency policy and reserves

Because of its fast financial growth, Chinas share from the worlds total GROSS DOMESTIC PRODUCT is approximately 9 percent (UNCTAD, 2012), and it owns the biggest amount of foreign reserves on the planet, but the supplies

consist mainly ALL OF US dollars. With purchasing euro-denominated assets, The far east can realize the diversification in its currency supplies thus reducing the danger of keeping wide range of dollars. Chinas old need to create a steady international financial system where the dollar would end up being less dominant may be only strengthened because of the current economic turmoil (Casarini, 2011). With this context, Mihalakas (2011) draws focus on the so-called Chinese Dilemma regarding diversifying Chinas holdings associated with USD. It holds true that the Chinese language enormous dollar reserves boost the countrys dependence about the USA and trigger global financial unbalances. But the Chinese language renminbi is pegged against the actual dollar at a good undervalued rate to be able to maintain the Hard anodized cookware economys global competition, and if The far east diminishes its ALL OF US Treasury bonds quantity, it would result in a significant strengthening from the renminbi against the actual dollar. This is actually contrary to the actual Chinese interests as well as this is the reason why Mihalakas (2011, g. 23. )#) claims which Europes leaders shouldnt expect some thing than symbolic Chinese support for that euro. Godement (2011) mentions the chance that China could give Europe in renminbi. In this instance the Asian country might transfer the exchange risk towards the EU. Furthermore, this sort of agreement could internationalize the actual renminbi, which is likely to happen - eventually. The high reserves and also the current crisis possess highlighted for China how the internationalizing the renminbi is particularly important. According in order to Gao and Yu ('09), Chinas potential advantages of internationalization of the actual renminbi are the following: 1. The exchange rate risk for that Chinese companies might decrease. 2. The international competitiveness from the Chinese financial establishments would increase. 3. The actual cross-border transactions might boost. 4. Internationalized renminbi might offset the seigniorage that China needs to pay to the united states. 5. It could preserve the worthiness of Chinas foreign currency reserves. With this knowledge it might not be astonishing if China tried to consider further steps with this direction.

4.1.4 Political impacts

Aside from economic issues, there's also political projections associated with Chinas potential monetary assistance to the actual Eurozone. China may use its financial help Europe as the bargaining power. This gives a large chance of China to accomplish certain political objectives such as the acceptance of it's market economy standing or dropping the actual arms embargo through the EU. China may also force the EUROPEAN UNION to refrain through criticizing its human being rights achievement. (We may concern these issues more in depth in section four. 2. )#) Morris (2011) draws focus on a strange historical similarity: in Oct 1911, after China rose up inside a

revolution, European financiers lent money towards the country. In comparison, in October 2011 European countries turned to The far east to borrow. Based on Morris (2011), it is among the biggest turnarounds in history also it illustrates well which Chinas global part has significantly changed in the past decades, not just in economic, but additionally in political feeling. Although Beijing has got the potential to help in the EMUs recovery in the debt crisis and it has compelling reasons to do this, but the Chinese intervention could cause really important problems within the domestic society how the Chinese government can't ignore. It is really a sensitive point with regard to Chinese people that although the Chinese economy grows within an amazing way, the amount of living standards in the united kingdom stands at a minimal point, especially within the southern rural places. Because of this particular, internal social as well as political tensions may emerge from assisting the Europeans who still reside in significantly higher prosperity than most from the Chinese (Pierson as well as Lee, 2011). This really is one reason for China to not be a loan provider of last resort as well as Wen Jiabao offers added that created countries must result in their fiscal as well as monetary policies and they need to cut the deficits within their country by their very own instead of awaiting China to conserve them (Badkar, 2011)..

LITERATURE REVIEW

The European debt crisis first started to attract global attention last year when Greece announced that its debt was13.7 % of GDP, not really 6 percent. At first, many in China thought how the problem would be short-term which the EU could address the issue quickly and successfully. It was contended in China how the euro crisis wasn't only one of several crises of its kind found in history, but additionally that it had been comparatively less serious than the ones that preceded it (Zhang, 2012). These views were supported through the confidence in the entire strength of the actual EU economy, the efforts by Europe, and the help of international businesses (Qiu, 2011). However the situation did not really develop positively through the end of 2011, Greek debt experienced reached an intolerable a lot of 165. 3 % (Eurostat, 2012) and also the country was about the brink of monetary collapse. Greeces domestic scenario became unstable along with political sentiments running full of nation-wide debates as well as elections. Other Europe Spain, Ireland, Spain, and Italy whose growth have been lagging for years were confronted with similar crises. Through mid to past due 2011, Chinese scholars agreed how the euro crisis is really a long and enduring struggle and recuperation would take five as well as eight years..

1. A new trend on the problem There is a new trend on European banks how to solve the European sovereign debt crisis that China is the essential role in this crisis. Some people hold this attitude is due to several reasons. First of all, since the European sovereign debt crisis was outbreak in 2010, the main problem for European bank to solve this crisis is lack of funds, at the mean time, American economy is not stable after the global financial crisis, so compared with other countries, China owned more ability to for help European countries relieve the crisis. It is reported by Bradsher (2012), while the Europe debt crisis becoming worse and worse, some of the countries in Europe issued the national debt, especially for Italian, 7 billion euros national debt have been issued in order to relieve the crisis, however, sales situation of the national debt is turn into another problem for Euro zone, therefore, Italy stated that they want China to but a large number of Italian national debt and investment its strategic industry company so that the country out of the debt crisis, as the China is one of the country which has ability to do this. And there is no strategic interests conflict between China and Europe; on the contrary, it is the strategic partner relationship, in this case, a cooperation can be established between China and European countries so that objective both of their strategic.

Secondly, the relationship between the economy of China and the economy of Europe are intimate, in other words, if Europe will be collapsed, the economy of China would be damaged significantly, as the European economy more than the United States, which is the first place in the world. According to Jiang (2011), the European Union is Chinese largest trading partners, a lot of manufacturing products which made in China has exported to Europe every year, it is can be said that the high cost from the European Union is greatly support the development of Chinese industry, and the employment pressure has been easing as well. Consequently, if the Chinese imports to Europe be stopped, not only Chinese economy will appear stagnation, but also the employment problems will get worse than past, this could lead to a stable and harmonious society be destroyed, it will be a serious political problems. 2. The impact of China

It is cannot deny that the economy of China is growing with a remarkable speed in recently years, and it is becoming one of wealth country in the world, that is the reason for some European countries ask for help from China during the period of the European sovereign debt crisis since outbreak. There are some data has been collected by Holscher (2010), the GDP in China has overtake Germany and followed the Japan which was the third place in the world since 2007, according to preliminary accounting, the GDP of China was 30.067 trillion yuan in 2008, compared with last year, it was increased of 9.0 percent, even during the time of economic recession, the number is still goes up, to be more accurately, 6.2% increased in the first quarter, 7.9% growth in the second quarter, 9.1% growth in the third quarter and the fourth quarter growth of 10.7%. Though these data, we can see that the economy in China is growing rapidly. However, compared with the United States, which owned the biggest GPD in the world, the GDP of China only account for 33 percent of America and the stability of economy in China is not good as the Unite States.

In terms of import and export trade, due to the new policies and measures has been enacted in recent years; China still has an important influence on global economic situation. In 2008, 1.13 trillion dollars commodities from other countries was imported to China; in 2009, the Chinese government has organized lots of trade and investment promotion group to America, Europe and other countries, even their economic development is facing serious challenges and under a difficult situation, so as to billions of dollars order has been signed; In 2010, the total amount of import in China was reach at 1.4 trillion dollars, which is the second biggest import country in the world(Jarreau 2012). Moreover, the stress of trade commodities has been adjusted so that the global trade is balanced. Before the financial crisis in 2008, China was focus on raw materials import, however, in 2010; the proportion of car and spare parts import was went up dramatically in order to balance the trade; and most of the car and spare parts are from the Unites States and Europe, which is developed countries. Therefore, it can be said that China provides the support to balance the bilateral trade.

3. The impact of the European sovereign debt crisis

As we all know, the European sovereign debt crisis bring a huge effect on global economy, otherwise, the countries would not have an anxious attitude to solve this problem. Until now, the crisis is last several years, and it would become worse and worse, some of bad situations will appear to influence the stability of global economy. The worst situation might be the Euro zone going to collapse. Overbeek (2012) stated that as some countries in the Europe can not meet the conditions of Euro zone, such as Greece, Italy and Spanish and so on, other countries will force them to quit Euro zone, after that, a new currency area will be establish by those countries which have a better financial situation like Germany, France and the North-western Europe countries. If this situation has happened in the future, there is a possible that some of those countries have to debt default, and it will impact other countries indirectly, especially for countrys banking industry and financial system. Furthermore, the value of stronger countries currency will increase significantly; and exports and economic growth could be affected by currency appreciation.

Not only the European sovereign debt crisis impact on the countries, but also the individuals. Lots of investors might change their mind about which country is best choice for invest. It is presented by Novak (2011), due to the European economic instability during the debt crisis, many investors reducing the investment in Europe, at the same time, a large number of capital might lose in Europe, the situation in the Europe will become worse than past inevitably, especially for small countries in Euro zone; furthermore, the European sovereign debt crisis lead to the euro depreciation, this is means that the international investor prefer to invest in dollars, all countries will have a knowledge about the foreign currency investment. Consequently, the debt crisis has considerable influence on the international investment environment, no matter where the country it is, so countries should unity to solve this problem.

4. Inspiration from the debt crisis and chapter conclusion The Europe sovereign debt crisis is a double edged sword to modern society, it is obvious that the crisis is harmful for global economy; on the other hand, it is an opportunity for countries and individuals to get benefits, which is means that companies and investors have more chance to

expand their business to European market. According to Matziorins (2012), it is general knows that sell new and high technology to some of the countries in the world is forbidden in the United State, and European is another area which owned high technology as well, through the European sovereign debt crisis, Europe countries have to share the new technology with other countries; moreover, if a country buy the national bonds from Europe countries, after the crisis has been solved, more benefits would be achieved for the country. However, this is high risk behavior, especially for the country which the economy strength is not powerful enough, if the European debt crisis will last a long time, the country which has buy European national bonds would be effected by the crisis.

Admittedly, the global economy is not stable as past since the European debt crisis was outbreak; this problem has attracted large numbers of economy expert to research how to relieve the crisis. In previous research, most of researchers only consider that China can help European banks in the crisis, while whether it is the most effective approach to solve this problem have not explored yet, if not, which is the best way to solve this problem is still a question to research.

Research methods Due to the present research is basing on the problem of the European sovereign debt crisis; the quantitative approach will be used. Moreover, this project will be secondary research based as the cost the time is limited. Some of primary research will be done as well, such as questionnaires to bankers, or survey in different banks.

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