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China's biggest wealth fund stops buying European government bonds

THE eurozone has lost a crucial lifeline as China's biggest sovereign wealth fund has said it no longer wants to buy European government debt.

Amid the resurgent political and financial crises in both Spain and Greece, Gao Ziqing, head of the China Investment Corporation (CIC), said the $440bn (€340bn) fund was "looking at opportunities in Europe" but added: "We don't want to buy any government bonds."

Eurozone leaders have tried to attract investors from Asia to help mop up excess sovereign debt. Both China and Japan have been supportive in the past, in part because Europe is one of their biggest export markets.

The retreat by China came amid political deadlock in Greece, the bank crisis in Spain and signs of a deepening economic recession. (© Daily Telegraph, London)

Irish Independent