Posted by WARREN MOSLER on June 21st, 2011
‘So what will you do for us if we buy your bonds instead of US bonds’ said the spider to the fly, as China continues to play us all off against each other.
(And it seems they have gotten ‘assurances’ regarding default risk.)
June 21 (Reuters) — China is willing to help European countries realise stable economic growth, China’s Foreign Ministry said on Tuesday ahead of a visit by Chinese Premier Wen Jiabao to Hungary, Britain and Germany this week.
“The Chinese government has already taken a series of proactive measures to push Sino-Europe trade and economic cooperation, such as buying euro bonds,” ministry spokesman Hong Lei told a regular news briefing when asked about China’s view of the Greek debt crisis.
“China is willing to continue helping European countries realise economic growth in a stable manner through cooperation with relevant countries,” he added, without elaborating.
Wen’s latest visit to Europe from June 24 to 28 will come months after he visited France, Portugal and Spain, and offered to help European economies overcome their debt-driven crises.
The debt crisis afflicting Greece and weighing on the euro is likely to overshadow his visit.
Markets will watch keenly for how Wen handles economic expectations this time, especially with Greece’s woes deepening. Last week, China’s central bank urged European governments to contain debt levels or risk worsening the region’s unfolding debt crisis.
China signalled in April that it could buy more debt from the euro zone’s weaker states. There are no precise figures, but China has said it has bought billions of euros of debt.
Since euro-zone debt worries first rippled through markets last year, China has repeatedly said that it has confidence in the single-currency region and pledged to buy debt issued by some of its troubled member states.
China’s interest in a smooth resolution to the European debt troubles has been clear. Of its $3 trillion or more in foreign exchange reserves, about a quarter are estimated to be invested in euro-denominated assets.