Economy

China will continue to buy Spanish debt

(Agencies)
Updated: 2011-01-03 16:19

In this April 30, 2010 file photo, Chinese vice premier Li Keqiang (C) visits the Spain Pavilion in the World Expo Park in Shanghai. [Photo/Xinhua]

MADRID  - Chinese officials have faith in Spain's financial system and will continue to take part in government debt auctions, China's vice premier Li Keqiang wrote in an editorial in El Pais on Monday.

"China is a responsible, long-term investor in the European financial market and particularly in Spain, and we have confidence in the Spanish financial market, which has meant the acquisition of its public debt, something which we will continue to do in the future," Li wrote.

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Spain has come under increasing pressure from international debt markets on concerns it may be forced to follow Greece and Ireland and seek an EU/IMF bailout, but while bond yields have risen, demand for Spanish debt remains solid.

Around 60 percent of demand for Spanish debt has come from non-resident investors, according to a Reuters source, and Asian interest has risen to a reported 9 percent at recent auctions.

The vice premier will begin a three-day visit to Spain on Tuesday before visiting the United Kingdom and Germany.

Li said China applauded austerity measures and structural reforms passed by Spain's Socialist government last year aimed at calming market concerns over its public deficit.

"China supports the measures adopted by Spain to readjust its economy, with a strong conviction that it will achieve general economic recovery," he wrote.