China warms to euro rescue efforts

Wen Jiabao tells EU delegation that Beijing stands ready to help, but stops short of commitment to buying bailout bonds.

EU-China summit
China has so far stopped short of buying European bonds to help bailout debt-stricken countries [Getty]

China is ready to increase its participation in efforts to resolved the eurozone’s debt crisis, Chinese premier Wen Jiabao has told European leaders at summit talks in Beijing.

Wen said on Tuesday that China  hoped to see Europe “maintain stability and prosperity,” but stopped short of saying whether China would buy bonds in a bailout fund designed to rescue debt-stricken EU countries.

“China’s desire to support the EU’s dealing with the European debt crisis is sincere and determined, and (China) remains confident in the euro and Europe’s economy. China supports the EU’s strengthening financial discipline, and hopes Europe continues to send clear and beneficial, positive news,” the premier said.

Al Jazeera’s Melissa Chang, reporting from Beijing, said that China had the potential to purchase a large amount of European bonds to help fight off the financial crisis, but had not done so due to doubts over whether its investment would generate sufficient returns.

“We have seen plenty of European delegates and envoys in the past few months come through here asking for assistance. And so far all that we have seen from China is a lot of words, but very little action,” she said. 

“The Chinese are not entirely confident that they will get their money’s worth if they assist the Europeans.” 

Earlier on Tuesday, Wen told EU leaders that the two sides were strategic partners and that it was in their basic interests to work together.

“We need to work together to send a positive, beneficial message to make necessary contributions toward pushing China-EU and even global unity and co-operation,” Wen said.

Herman Van Rompuy, the European Union’s top official, said the economies of the two sides were “so interdependent that change in the growth rate in one of the two strategic partners has a direct and palpable impact on the other one.”

“We welcome the positive attitude and engagement China and Premier Wen himself have taken publicly towards the stability of the eurozone and the European Union. We also welcome China’s readiness to enhance consultation and
cooperation on the stability of the Eurozone,” Van Rompuy said

The summit came hours after US-based credit ratings agency Moody’s downgraded its credit ratings on Italy, Portugal, Spain and three other eurozone economies. France, Britain and Austria kept their top ratings but had their outlooks dropped to “negative” from “stable”.

The talks between EU and Chinese officials are expected to also touch on a European law imposing charges on airline carbon emissions. China has said it will prohibit its airlines from paying the charges, aimed at curbing emissions of climate-changing gases.

Source: Al Jazeera, News Agencies