Commentary: Chinese premier visits Europe at time of debt crisis

08:37, June 26, 2011      

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Chinese Premier Wen Jiabao embarked on an official visit to Hungary, Britain and Germany Friday, as Europe grapples with an escalating sovereign debt crisis centered on Greece.

China was ready to purchase Hungarian government bonds and extend a one billion euro (1.4 billion U.S. dollars) credit to the country, Wen said in Budapest Saturday.

"China's government has adopted a series of positive measures, such as increasing its holdings of euro bonds and promoting its economic cooperation and investment in Europe, to help European countries tide over the current crisis," said Chinese Foreign Ministry spokesman Hong Lei prior to Wen's visit.

As an old Chinese saying goes, "A friend is never known till a man has need," which is what China has been doing since the European sovereign debt crisis started early last year. A series of concrete moves by Beijing has proved that China regards Europe as a real strategic partner and will act as a responsible strategic partner itself.

The Chinese government has despatched a number of procurement delegations to Europe with contracts worth billions of dollars, and steadfastly backed the stabilizing measures taken by the EU and the International Monetary Fund.

China also has purchased large amounts of the national debt of European countries such as Greece, Spain and Portugal, helping them boost confidence in their local economies and markets.

In October last year, Wen paid official visits to Greece, Belgium, Italy and Turkey and attended the 8th Asia-Europe Meeting (ASEM) and the 13th China-EU summit.

During Wen's visit to Greece, he announced China would continue to hold and buy Greek bonds, and voiced hope trade between the two countries could double to 8 billion dollars in five years.

Greek Deputy Foreign Minister Spyros Kouvelis thanked China during his visit in May this year for its "vote of confidence", calling it "one of the most important during a period of economic difficulty."

The Euro Group troika also expressed appreciation of China's support of the euro while meeting Wen on the sidelines of the ASEM.

Though warned by analysts about possible debt restructuring and even default by several European countries that could hurt China's vital interests, the Asian country is determined to take the risk and stand by its EU counterpart.

China Investment Corporation chairman Lou Jiwei told the Boao Forum for Asia in April the Chinese sovereign wealth fund would continue to invest in Europe despite the clouds hanging over the European economy.

His remarks were seen as renewing China's promise to purchase debt from the troubled EU members, after Chinese leaders have repeatedly voiced support in the past two years.

Wen reinforced the message during a meeting with visiting Spanish Prime Minister Jose Luis Rodriguez Zapatero in April, reiterating that China would continue to buy Spain's government debts.

China currently held 12 percent of Spain's government debt, up from less than 4 percent, Zapatero said, adding that Spanish and Chinese enterprises signed eight deals worth 1 billion euros (1.4 billion dollars) during the visit.

European Council President Herman Van Rompuy paid his first official visit to China last month, seeking closer trade and political ties and labeled China "a main trading partner" and "a partner in global governance."

"China has been supportive to euro area countries facing difficulties experienced by the euro, just as the EU supports China's stable development with investment and technology," Van Rompuy said, "We are becoming part of the solution of the other side's challenges."

Wen's ongoing visit to Europe, with a small delegation of heavyweight figures, including Minister of the National Development and Reform Commission Zhang Ping, Minister of Commerce Chen Deming and central bank governor Zhou Xiaochuan, is expected to help EU further battle the debt troubles that have lasted 18 months.

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