Hu says China confident in Europe

Updated: 2011-08-26 06:59

By Li Lianxing, Li Xiaokun and Lan Lan (China Daily)

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BEIJING - China remains confident in the European economy and the continent is a significant investment partner, President Hu Jintao said on Thursday when he met his French counterpart Nicolas Sarkozy who paid a flying visit to the Chinese capital.

Hu says China confident in Europe

President Hu Jintao (R) greets French President Nicolas Sarkozy at the Great Hall of the People in Beijing on Thursday. [Photo/ Xinhua]

Hu, however, also urged Europe to take measures to protect China's massive investments there.

"China is concerned about the impact of the euro debt crisis, and hopes that the European economy can maintain stability and that countries can carry out financial reform," Hu said, according to a news release issued by the Foreign Ministry after the one-hour meeting at the Great Hall of the People.

"China has confidence in the European economy and the euro, and we are sure that Europe has the wisdom and ability to surmount its current hardships and maintain economic stability and growth," Hu said.

"China will continue making Europe one of its principal investment markets, and we hope that Europe will take measures to ensure the security of Chinese investments there."

It has been estimated that about a quarter of China's foreign currency reserves of more than $3 trillion are held in euro assets.

Along with Germany, France has resisted calls from other countries in the euro zone to expand the zone's 440 billion euro bailout fund and sell bonds to address the crisis.

At the start of the meeting Sarkozy told Hu that China has an "essential role" to play in efforts to boost the global economy at the next G20 meeting in November.

"As president of the G20, I never imagined not coming to China to talk to my Chinese friends about the major economic issues that are preoccupying the world," the French president said.

"The G20 summit must ... take decisions and participate in the revival of global growth. This is a major issue and China has an essential role to play."

France is chairing the G20 group and will host the next G20 meeting in the coastal resort of Cannes.

The two presidents met at 5:15 pm. After further discussions over dinner, Sarkozy ended his five-hour stopover in Beijing and flew on to France's Pacific territory of New Caledonia for his first official visit there.

The visit "fully reflects the level of strategic mutual trust between China and France", Hu told Sarkozy.

"This is Sarkozy's sixth official visit to China after taking office in 2007, which reflects the high importance he attaches to bilateral ties with China," said Feng Zhongping, director of the Institute of European Studies at the China Institutes of Contemporary International Relations.

"A sudden visit is also a feature of the French president," he said. The last time Sarkozy visited China was in March for a meeting held in Nanjing, capital of East China's Jiangsu province, for a seminar on the G20 summit. He spent just half a day there.

Wang Haifeng, a senior international researcher of a think tank under the National Development and Reform Commission(NDRC), said the short visit also bears political significance.

"Sarkozy wants to show voters a close relationship with Beijing, to boost his chances of re-election," Wang said.

"He (Sarkozy) might want more support from Chinato buy European bonds", an official of the European Commission told China Daily on condition of anonymity.

Ever since the outbreak of the debt crisis in 2009, China has been buying bonds from Spain and other European nations, according to the Ministry of Commerce.

Though it is not very optimistic about the European economy, China Investment Corp, the nation's sovereign wealth fund, will continue to invest in Europe, chairman Lou Jiwei said in April.

Premier Wen Jiabao also announced that Beijing will buy bonds from Hungary when he visited the country in late June. But the European Union lacks a strong economic mechanism to avoid further debt crises,the European Commission official said.

It is a very controversial issue that can only be resolved by changes in the EU, he said.

The NDRC's Wang also said that it is unlikely that China will increase its holdings of EU government debt by a large amount, because dollar assets remain healthier and the US economy remains steady, despite the recent credit rating downgrade.

Vice-Foreign Minister Fu Ying said on Tuesday that China and Western countries have shared interests in the health of Western economies.

"We have a high level of interdependency, and financial losses suffered by the West are not to our benefit," she said.