Reply #24: China signals ready to invest more in euro zone [View All]

[Demeter]

PT BARNUM'S APOCRYPHAL LIVES!

http://www.reuters.com/article/2011/04/21/eu-china-bonds-idUSLDE73K1LC20110421

China signalled on Thursday it was ready to buy more debt from the euro zone's weaker states, in a move to help stabilise the bloc's fragile finances and protect its business interests.

After investing billions of euros in Portuguese and Greek bonds to diversity its "huge" foreign exchange reserves away from the dollar, China was now considering buying more, Song Zhe, Beijing's ambassador to the European Union, said.

China was also in talks to invest in Spain, including in the reorganisation of troubled Spanish savings banks, the Ministry of Foreign Affairs said earlier in Beijing. China is keen to diversify its currency reserves -- which rose in the first quarter to $3.05 trillion -- with the euro the primary alternative to the dollar, which accounts for around two thirds of its holdings.

But Daniel Gros, a euro zone expert with a Brussels-based think tank, the Centre for European Policy Studies, said heavy bond buying in Europe by China was unlikely.