China to invest in eurozone - at a cost
Published 14/09/2011 | 14:24
China has committed to investing more in the troubled eurozone but has said it expects Europe to reciprocate by granting China 'market economy' status which would lower the country's exposure to anti-dumping cases.
Chinese premier Wen Jiabao has made what amounts to the country's most definitive statement on the eurozone crisis so far, stating that he believes in European officials' ability to solve the current problems.
"China believes that Europe will be able to resolve its problems," Mr. Jiabao told those gathered at the World Economic Forum's summer session in the Chinese city of Dalian. "European countries are facing sovereign debt problems. We've said countless times that China is willing to give a helping hand, and we'll continue to invest there."
However, the premier also voiced his concerns over the sustainability of some European nations' sovereign debt. He also said that the major eurozone economies should undertake the policy measures necessary to stabalise the region.
"The governments of all countries must truly shoulder their responsibilities and deal properly with their own affairs," said Mr. Jiabao. "The major developed economies must adopt fiscal and monetary policies that are responsible and effective, and appropriately deal with debt problems, ensuring the secure and stable operation of investment markets."
It is estimated that China currently hold of its $3.2 trillion in foreign reserves.
European countries have yet to agree on giving China 'market economy' status and officials have told China that in order to do so the Chinese government must meet a specific set of technical criteria.
It was reported this week that Italy asked China to buy large portions of Italian government debt in a bid to drive down the cost of borrowing but China has expressed interest in directly investing in Italy's industrial sector.