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China promises EU 'helping hand' with debt crisis

China promises EU 'helping hand' with debt crisis

Updated: 2011-06-28 20:19


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China promises EU 'helping hand' with debt crisis

German Chancellor Angela Merkel shakes hands with Premier Wen Jiabao as she welcomes him to the Chancellery in Berlin, June 28, 2011. [Photo/Agencies] 

BERLIN - Premier Wen Jiabao offered Europe a "helping hand" with its debt crisis during a visit to Germany on Tuesday and said China could buy the sovereign debt of some troubled euro zone nations if needed.

"China has expressed support for Europe at various times. In other words, when Europe is in difficulty we will extend a helping hand from afar," the Chinese premier told a joint news conference with German Chancellor Angela Merkel.

"We will according to need definitely purchase certain amounts of sovereign debt," said Wen, who described the problems of highly indebted euro zone countries like Greece as being of only a "temporary nature".

Capital Economics estimated in a research note that China bought more than 40 billion euros of euro-denominated assets this year, much of that in peripheral economies.

The EU and International Monetary Fund are putting pressure on Greece to give political backing to a tough austerity programme to qualify for ongoing aid and work out a second bailout meant to tide it over after 2012.

About a quarter of China's record foreign currency reserves of more than $3 trillion are estimated to be held in euro assets and China has reiterated its confidence in the euro since the debt crisis began.

Wen visited Germany on the final leg of a European tour taking in Hungary and Britain. It was the first time China and Germany -- the world's two biggest exporting nations -- had held full ministerial consultations aimed at boosting trade.

Wen said the main point of the bilateral meeting was to "boost the growth potential of bilateral trade ... and to once again double our bilateral trade volume in five years".

He said deals worth more than $15 billion were signed by Chinese and German firms during the visit. Airbus signed a deal with China Aviation Supplies and an aircraft leasing arm of China's ICBC bank for the delivery of 88 A320 planes, with a list price of $7.5 billion.

Merkel said she expected bilateral trade to reach about 200 billion euros over that period, from 130 billion euros in 2010 when trade had already surged 34 percent on the previous year.

Britain and China signed deals worth $2.3 billion during the premier's visit there on Monday.

Germany hopes for a rebalancing of investments between the two countries, with Germany's direct investments in China now standing at 20 billion euros compared to Chinese investments in Germany of only about 600 million, German officials said.