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China central banker expresses confidence in euro

China central banker expresses confidence in euro

February 15th, 2012 by JOE McDONALD, AP Business Writer in News

BEIJING (AP) - China's central bank governor expressed confidence in the euro at an appearance Wednesday with visiting European Union leaders and said Beijing will keeping buying the debt of European governments.

China also will encourage its companies to invest in Europe, Zhou Xiaochuan said during an event at a university with European Council President Herman Van Rompuy and European Commission President Jose Manuel Barroso.

"We have confidence in the eurozone," Zhou said of the 17 nations that use the euro common currency. "We firmly support all the measures taken by the European Union and the eurozone to overcome difficulties and build confidence."

"China will, under the principles of safety, protecting value and increasing value, actively invest in European countries' government debt," he said.

Chinese leaders have repeatedly expressed support for Europe, China's biggest export market, but have given no sign they would do more than continue to invest in the safest European government bonds.

European leaders are looking to China for a possible contribution to the continent's bailout funds from its $3.2 trillion in foreign reserves.

On Tuesday, Premier Wen Jiabao said at a news conference with Van Rompuy and Barroso that Beijing is willing to increase its role in helping Europe resolve its problems but he made no financial commitments.

Beijing's stake in Europe's financial health has grown as Chinese companies step up investment there, acquiring European companies or starting their own.

Van Rompuy said Europe is getting its debt problems under control. He said that despite fears of a breakup of the euro, leaders see a "common European destiny at stake" and have taken "drastic measures" to ensure its survival.

"You should understand European leaders, when in difficulty, will do everything that is required, everything that is required, to maintain the euro and the financial stability of the eurozone," he said.

On Tuesday, European efforts to bail out Greece suffered a setback when a meeting of finance ministers of euro nations was called off after Athens failed to deliver on several demands by its partners.

The cancellation of the Wednesday meeting showed that euro nations want tougher guarantees from Athens before giving it an extra (euro) 130 billion ($171 billion) in rescue loans, on top of (euro) 110 billion ($145 billion) granted in 2010, raising fears that the complex deal could still fall apart.