German Chancellor Angela Merkel found out last week from Chinese Prime Minister Wen Jiabao what tributes would be extracted for China underwriting a Eurozone rescue package. It looks like the Chinese want both guns and butter.

According to New York Times reporters  Keith Bradsher and Liz Alderman, China wants to buy military products from Europe and be able to sell more goods at reduced tariffs on the continent. No word on first-born male children yet.

Europe has rebuffed these requests before, but times are changing fast. As detailed previously  on www.emergingmoney.com , Greece is expected to default on its debts on March 20. There have been nearly 20 summits to resolve the European debt crisis, and the only result has been ratings agencies downgrading France, Austria and other countries.

China can afford to prolong the pain for Europe.  The worse things get for the Eurozone, the higher the interest rates that will have to be paid on the bonds. And where else are the European nations going to get help?

Russia can only offer a $20 billion bailout. The United States is already helping with swaps. Neither country can spare enough resources to offer a long-term solution. Meanwhile, China has over $3 trillion in foreign reserves, by far the most of any country in the world.

In the end, the Europeans have nowhere else to turn -- and the Chinese know it.