Partners prepared for challenges ahead

The global financial crisis and its aftermath have been a trying time for both the eurozone and China, although in different ways.

Pessimists expecting a break-up of the eurozone and a marked slowdown in China's growth have been proved wrong on both counts. In particular, they underestimated the determination of political leaders to take the bold decisions necessary to address the economic challenges they were facing.

How is the eurozone overcoming the crisis? Strong firewalls have been erected with the European Central Bank's announcement of its "Outright Monetary Transactions" program and through the European Stability Mechanism. Progress is being made to establish a fully fledged Banking Union, which will break the vicious circle between banking instability and sovereign risk. This is a major step forward in the process of European integration, which was unthinkable only a few years ago.

Second, fiscal consolidation has continued at the national level and, in contrast to other advanced countries, the European Union already has a credible fiscal framework in place that will ensure sustainability in the medium term, but also in the long term as the population ages. Moreover, a range of far-reaching structural reforms have been set in place, especially in vulnerable countries.

Reflecting these policy efforts, financial conditions have greatly improved, internal imbalances are being reduced, and any talk of break-up of the eurozone has subsided. The eurozone economy is finally coming out of recession and a gradual recovery is expected to gather strength in 2014 and 2015.

In China, after a strong countercyclical response to the global recession, the focus has shifted to redefining the quality, equity and efficiency of economic development.