|EU - China: Wen offers helping hand to debt-hit euro nations|
|Written by Europe Business Center International|
|Wednesday, 29 June 2011 10:13|
CHINESE Premier Wen Jiabao offered Europe a "helping hand" with its debt crisis during a visit to Germany yesterday and said his country could buy the sovereign debt of some troubled eurozone nations if needed.
"China has expressed support for Europe at various times. In other words, when Europe is in difficulty we will extend a helping hand from afar," the Chinese premier told a joint news conference with German Chancellor Angela Merkel.
"We will, according to need, definitely purchase certain amounts of sovereign debt," said Wen, who described the problems of highly indebted countries such as Greece as being of a "temporary nature."
As when previously talking about eurozone debt, Wen did not give specific figures on potential purchases, nor which countries' debt China might purchase.
Capital Economics estimated in a research note that China has bought more than 40 billion euros (US$57.43 billion) of euro-denominated assets this year, much of that in peripheral economies.
Merkel said China has a "massive" interest in a stable euro.
The EU and International Monetary Fund are putting pressure on Greece to give political backing to a tough austerity programme to qualify for ongoing aid and work out a second bailout meant to tide it over after 2012.
About a quarter of China's record foreign currency reserves of more than US$3 trillion are estimated to be held in euro assets and China has reiterated its confidence in the euro since the debt crisis began.
Wen visited Germany on the final leg of a European tour taking in Hungary and Britain. It was the first time China and Germany - the world's two biggest exporting nations - had held full ministerial consultations aimed at boosting trade.
China and Germany aim to boost trade to at least 200 billion euros in the next five years.
Wen made it clear that the main point of the meeting between Chinese and German ministers and economic officials in Berlin was to "boost the growth potential of bilateral trade and to once again double our bilateral trade volume in five years."
Merkel said she expected bilateral trade to reach about 200 billion euros over that period from 130 billion euros in 2010, when trade already surged 34 percent on the previous year.
Germany hopes for a rebalancing of investments between the two countries, with Germany's direct investments in China now standing at 20 billion euros, compared to Chinese investments in Germany of only about 600 million euros, German officials said.