Wednesday, April 20, 2011

THIS will leave a mark:
Even for an unwary western traveller, it was an avoidable pitfall.

Basking in the effusive warmth of the official welcome he had received in Beijing, José Luis Rodríguez Zapatero, the Spanish prime minister, left the Chinese capital last week convinced he had secured the promise of billions of dollars of investment in Spain’s struggling savings banks.

Had not Wen Jiabao, China’s premier, said that Spain was “China’s best friend in Europe”? Had he not also said that “two countries know true friendship in adversity, as the greenness of the pine tree is revealed in the harshest depths of the winter”? Westerners love a good Chinese proverb.

Had not Mr Zapatero been equally fulsome, reciprocating the compliment by declaring that “China is Spain’s best friend” and stifling the urge to complain in public about human rights abuses or the arrest of the dissident artist Ai Weiwei?

And had not Xie Ping, a senior official of the China Investment Corp (CIC), a big sovereign wealth fund, spoken to Mr Zapatero of the €9bn ($12.9bn) available to spend on restructured banks and Spanish sovereign debt?

That, at least, was what euphoric Spanish officials breathlessly told their national media.

But in the cold light of the next day, the CIC denied any concrete plan to invest, and Madrid had to confess to “an error of communication”. It turned out that the CIC would never have considered such a big investment and that Mr Xie was not quite as important in the fund as the Spanish believed.

There are lessons for both sides in this embarrassing episode.
Keep reading.