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If China Wants To Bail Out Europe, Here's How It Should Be Done

Yesterday, NPR ran a segment about Europe turning to China to help fund its bailout package, contrasting Arvind Subramanian’s view — that this signals an important shift in the balance of economic power — with my own — that China’s piling up of foreign currency reserves is part of the problem, and that if China wanted to do Europe, and itself, a real favor, it would spend those reserves rather than lend them.
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