China says European recovery of crucial importance

AP News
Posted: Jun 17, 2011 3:57 AM
China says European recovery of crucial importance

China registered new concern Friday over the fate of its top trading partner, the embattled eurozone, saying the ability of stricken countries to overcome their financial woes is of "crucial importance."

China's support in terms of buying European debt and promoting imports is beneficial to both sides, Vice Foreign Minister Fu Ying told reporters at a briefing ahead of Premier Wen Jiabao's visit next week to Hungary, Britain and Germany.

But she expressed some anxiety over the fate of the eurozone. Greece is at risk of defaulting on its debt even after a massive bailout, and European leaders fear the country's problems could hurt other struggling economies that use the euro, including bailed-out Ireland and Portugal.

"Whether some European countries can overcome their difficulties and recover from the crisis is of crucial importance for China," Fu said.

"Therefore since the advent of the financial crisis, China has on one hand been trying to stimulate our economy and overcome the impact of the crisis, while on the other hand provided support to European countries in their efforts to overcome the financial crisis," she said.

China has supported highly indebted European countries, offering last year to buy Greece's debt and reportedly pledging to buy $4 billion in Portuguese government debt.

While China has been quiet on how much money it will actually invest, the pledges from Beijing have temporarily taken some pressure off European debt markets.

No agenda has been announced for Wen's visit, although the European debt crisis is expected to be a major topic of discussion.

Top on the list could be Greece, where rioters have clashed with police in Athens over proposed austerity measures and coalition talks between Greece's government and opposition parties have collapsed, renewing fears of a government debt default.