China has a stake in helping eurozone countries get through their debt crisis, Chinese Premier Wen Jiabao (溫家寶) said in comments published yesterday, pointing to Europe’s importance as a market and hinting at more possible support for beleaguered exporters.
Wen’s remarks, reported by -Xinhua news agency, built on comments he made during German Chancellor Angela Merkel’s recent visit to China, when he said Beijing was considering increasing its participation in rescue funds to address the European debt crisis.
This time, Wen urged skeptical Chinese citizens to understand that supporting Europe was in their own benefit.
“Now Europe is facing a debt crisis and we must consider relations with Europe strategically to protect our national interests,” Wen said while visiting the export-dependent province of Guangdong on Saturday, Xinhua said.
China, with its US$3.2 trillion worth of foreign exchange reserves, is often seen as a potential source for funds needed to bail out some European governments.
The Chinese premier’s latest comments on the euro crisis again did not include any specific commitments to European economies, but he stressed the stake that China holds in defusing the euro crisis.
“On the one hand, our biggest export market is Europe,” Wen said. “On the other hand, Europe is our biggest source for importing technology. From this perspective, helping to stabilize European markets in fact amounts to helping ourselves. We must make all quarters of society understand this point.”
At a joint media briefing in Beijing with Merkel on Thursday, Wen said China was studying how it might lend Europe further support.
“China is also considering increasing its participation in the solution of the European debt crisis through the channels of the EFSF [European Financial Stability Facility] and ESM [European Stability Mechanism],” Wen said at that briefing.
The ESM, a 500 billion euro (US$650 billion) permanent bailout fund due to become operational in July, is expected to replace the EFSF, a temporary fund that has been used to bail out Ireland and Portugal and will help in the second Greek package.
China has repeatedly said that it supports a stable euro, and according to most estimates, China has about a quarter of its foreign exchange reserves in euro assets.
However, Beijing has consistently been reluctant to make specific promises about any contributions to the rescue funds.
China’s exports to advanced economies, including Europe, have been hit by their continued woes, and Wen said his country’s manufacturers would have to adapt and open up new markets. He also hinted that more support might come.
“Import and export policy must maintain overall stability,” said Wen in a discussion with Guangdong manufacturers, Xinhua reported.
“If there must be adjustments, it should be more in the form of encouragement than restrictions,” Wen said.