Italy 'appeals to China to buy bonds'

Sovereign wealth fund considering buying bonds following talks in Rome, media reports say.

    The meeting was said to have included Italian Finance Minister Giulio Tremonti [EPA]

    Talks are reported to have been held between Italian officials and China's sovereign wealth fund in an effort to persuade Beijing to buy Italy's government bonds or invest in its companies.

    The chairman of China Investment Corporation (CIC) met with Italy's finance minister, Guilio Tremonti, last week in Rome, the Wall Street Journal and the Financial Times reported on Tuesday, citing unnamed sources.

    They gave no indication as to whether the two sides had reached any agreements. Phone calls to CIC's Beijing headquarters were not answered.

    The cost of borrowing for the Italy has reached record highs and any buying of bonds by Beijing with help ease the situation.

    The reports come as Italian politicians consider a plan to slash spending in an effort to stabilise government debt equal to nearly 120 per cent of the country's annual economic output.

    CIC was created in 2007 to invest a portion of Beijing's $3.2 trillion in foreign reserves, the bulk of which are held in safe but low-earning assets such as US Treasury debt.

    The fund says it has assets of $409.6bn, which includes stocks in a wide array of major Western companies.

    The fund's annual report in June said it is essentially fully invested, with only four per cent of its assets in cash.

    The talks in Rome were also attended by CIC chairman Lou Jiwei and officials of China's foreign currency regulator and the Cassa Depositi e Prestiti, an Italian government investment vehicle, the Wall Street Journal said.

    Italy's financial crunch has prompted Rome to consider selling stakes in major state-owned companies such as power utility Enel or oil and gas supplier Eni, according to news reports.

    SOURCE: Agencies


    YOU MIGHT ALSO LIKE

    Interactive: Coding like a girl

    Interactive: Coding like a girl

    What obstacles do young women in technology have to overcome to achieve their dreams? Play this retro game to find out.

    Heron Gate mass eviction: 'We never expected this in Canada'

    Hundreds face mass eviction in Canada's capital

    About 150 homes in one of Ottawa's most diverse and affordable communities are expected to be torn down in coming months

    I remember the day … I designed the Nigerian flag

    I remember the day … I designed the Nigerian flag

    In 1959, a year before Nigeria's independence, a 23-year-old student helped colour the country's identity.