Correspondent's Choice

This story about Chinese purchases of Greek debt was published by EurActiv on 4th October 2010.

Beijing offered to buy Greek debt on Saturday (2 October) and pledged to support a stable euro and not reduce its holdings of European government bonds in an effort to deflect criticism of its foreign exchange policy ahead of an EU-China summit this week.

China, at loggerheads with the United States over the yuan and likely to face similar complaints during his tour of European countries this week, emphasised its willingness to cooperate with the 27-nation EU.

“I have made clear that China supports a stable euro,” Chinese Premier Wen Jiabao said during a visit to Greece at the start of a one-week European tour. “We will not reduce the holdings of European bonds in our foreign exchange portfolio,” he added.

Wen, who offered on Saturday to buy an unspecified amount of Greek government bonds when debt-laden Athens resumes issuing, said on Sunday he was glad Greece was starting to emerge from the shadows of its debt crisis.

China has said it needs to diversify its foreign currency holdings and has bought Spanish government bonds. Chinese state entities have been generally conservative about investing in foreign financial markets and the Chinese government faces domestic political criticism over losses they incurred during the global financial crisis.

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