Wed, Dec 22, 2010 - Page 10 News List

China supports EU financial measures

PAYING TRIBUTE:China expects ‘substantive’ progress during talks on a wide range of issues, including the relaxation of EU restrictions on the export of high-tech goods


China supports measures taken by the EU and the IMF to stabilize Europe’s debt crisis, Chinese Vice Premier Wang Qishan (王岐山) said yesterday.

China has also taken steps to help European nations combat the sovereign debt crisis, Wang said at the opening of the third China-EU High-Level Economic and Trade Dialogue.

Wang said the two sides “should have confidence and enhance cooperation to work together for a robust, sustainable and balanced growth,” according to the official Xinhua news agency.

The euro firmed slightly yesterday after China expressed support for measures taken by the EU to tackle the eurozone debt crisis, dealers said.

The euro fetched US$1.3172 in Tokyo afternoon trade, against US$1.3126 in New York late on Monday. The single European currency rose to ¥109.95 from ¥110.20. The US dollar eased from ¥83.78 to ¥83.64.

As the euro firmed against the yen, Japanese shares gained 1.51 percent to close at the highest level in more than seven months yesterday.

The Nikkei index of the Tokyo Stock Exchange rose 154.12 points to 10,370.53, the highest finish since May 14. The TOPIX benchmark of all first-section shares gained 0.85 percent or 7.66 points to 906.21.

“Eased concerns about the European debt problems led to buying back of shares,” Hisatsune Kobayashi, a senior market analyst at Nikko Cordial Securities said.

He said the remarks led to speculation China may further step up buying of bonds in eurozone economies.

Last week, EU leaders agreed to the creation of a permanent rescue mechanism for debt-laden countries in 2013 that would replace an existing bailout fund.

Ireland last month agreed to borrow up to 67.5 billion euros (US$90 billion) from the EU and IMF and implement severe spending cuts as its economy staggered under the weight of massively indebted banks.

China has also been involved in bailing out European countries, offering in October to buy Greece’s debt. Last week, Portugal said that China had pledged increased support for its efforts to climb out of a financial crisis, reportedly promising to buy US$4 billion in Portuguese government debt.

The EU is China’s largest trading partner, while China is the EU’s second-largest trading partner behind the US, Wang said. Two-way trade for the first 11 months of this year reached US$433.9 billion, an increase of 33 percent from the previous year.

Wang reiterated that China would implement a prudent monetary policy to ensure the world’s second-largest economy maintains steady growth.

“China is taking a proactive fiscal policy and stable currency policy, while the EU is actively taking measures to combat the debt crisis,” Wang said. “China and the EU should strengthen cooperation to promote strong, sustainable and all-around growth for the economies of China and EU and even the global economy.”

Wang said he expected “substantive” progress during the talks on a wide range of trade and economic issues, including recognition of China’s market economy status and the loosening of EU restrictions on high-tech goods exports.

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