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Submitted by ctv_en_6 on Mon, 10/04/2010 - 10:20
China pledged on October 3 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, emphasized 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.

Mr. Wen, who offered on September 3 to buy an unspecified amount of Greek government bonds when debt-laden Athens resumes issuing, said he is 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.

Ahead of a China-EU summit on October 6, the Chinese PM urged the block to recognize China as a market economy, a status that will make it less vulnerable to anti-dumping charges under WTO rules.

In exchange, China offered to boost copyright protection and widen bilateral trade. "China commits to improving investment environment, to intensify copyright protection, widen bilateral trade and upgrade technology cooperation," he said in his speech in Greece's parliament through an interpreter.

But despite its growth, China remains an emerging economy, he said. "The basic reality of China, such as a huge population, a weak economic base, and unbalanced growth has not radically changed," he told parliament.

VOVNews/Reuters

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