Asia-Pacific News

China 'positive' but cautious over eurozone debt

Feb 14, 2012, 11:00 GMT

Chinese Premier Wen Jiabao (3-L) in talks with European Council President Herman Van Rompuy and European Commission President Jose Manuel Barroso (not pictured) at the Great Hall of the People during the European Union (EU)-China summit in Beijing, China 14 February 2012. EPA/HOW HWEE YOUNG/POOL

Beijing - Chinese and EU leaders met on Tuesday but hopes of China agreeing to buy European debt appeared to be dashed by a senior official's comments ahead of the summit.

European Council President Herman Van Rompuy said Chinese Premier Wen Jiabao expressed a 'positive attitude' towards efforts to stabilize the eurozone during talks in Beijing on Tuesday.

Wen said China was 'ready for a bigger part' in tackling the EU debt crisis and would 'forge closer communication and coordination' on the issue with EU officials.

But state media earlier quoted Lou Jiwei, head of the sovereign fund China Investment Corporation, as saying China was reluctant to invest in European debt and saw better investment prospects in infrastructure and industry.

European government debt was 'not good enough' for long-term investors, the China Securities Journal quoted Lou as saying at a conference on Monday.

The two sides said they made 'important progress' after Wen met Van Rompuy and European Commission President Jose Manuel Barroso at the 14th EU-China summit in Beijing on Tuesday.

In a joint statement, they vowed to 'strengthen their interaction and cooperation to better meet the opportunities and challenges in the new bilateral, multilateral and global framework.'

The talks focused on the eurozone debt crisis and a range of bilateral and global economic and political issues.

They pledged to expand bilateral trade and investment, and agreed to 'deepen the bilateral dialogue and practical cooperation in the fields of macro-economy, trade and finance.'

Van Rompuy and Barroso also planned to hold separate talks with President Hu Jintao and Vice-Premier Li Keqiang, EU officials said.

Chinese state media said the talks took place against the backdrop of 'growing global economic uncertainty and the spreading euro debt crisis.'

The summit would 'release a signal which shows the outside world that China and Europe will face the crisis hand in hand ... and stimulate global economic growth,' official Xinhua news agency said.

The European Union had been keen to win China's verbal and practical backing for its handling of the debt crisis.

But Xing Hua of the Beijing-based China Institute of International Studies said China wanted to avoid risky investments and was likely to wait until the European Stability Mechanism replaced the European Financial Stability Facility as the EU's bailout fund in July.

'We hope first to see the EU countries show more confidence in the EFSF and ESM ... and guarantee their support for those two funds,' Xing told dpa before the summit.

Another commentary on Tuesday on the website of People's Daily, the ruling Communist Party's official newspaper, said China had no plans to 'buy up' or control Europe.

Ratings firm Moody's on Monday lowered its credit ratings for Italy, Spain, Portugal, Malta, Slovenia and Slovakia, and gave a 'negative' outlook for France, Britain and Austria.

The downgrades reflected those European economies' 'susceptibility to the growing financial and macroeconomic risks emanating from the euro area crisis,' Moody's said.

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