China backs Spanish economy despite market distrust

Wed, 05 Jan 2011

Madrid - Chinese Vice Premier Li Keqiang on Wednesday stressed Beijing's confidence in the solidity of the Spanish economy despite the distrust of financial markets.

Li made the comments to about 100 Spanish and Chinese entrepreneurs on the second day of a key visit to Spain, according to sources present at the meeting.

China and Spain were expected to sign 16 commercial agreements valuing a total 5.65 billion euros (7.5 billion dollars) during the visit.

Prior to the visit, Li said China would continue buying Spanish public debt as a sign of confidence in the country's economy.

Beijing was seen by Spanish analysts as trying to diversify its currency reserves and to stabilize the euro, the currency of one of its most important export markets.

China was also expected to seek Spanish support for an eventual decision by the European Union to lift the arms embargo it imposed after hundreds of people were killed in the Tiananmen Square protests in 1989.

Later on Wednesday, Li was scheduled to meet with King Juan Carlos, Prime Minister Jose Luis Rodriguez Zapatero and Foreign Minister Trinidad Jimenez, following meetings with Economy Minister Elena Salgado and Industry Minister Miguel Sebastian on Tuesday.

Spain was Li's first stop on a European tour which will also take him to Germany and Britain.

Spain has adopted austerity and structural measures in an attempt to deal with its economic problems, including a budget deficit of 11.1 per cent. There has been concern that Spain might follow Greece and Ireland in needing an international bailout.

Source: Earth Times.
Link: http://www.earthtimes.org/articles/news/360791,spanish-economy-market-distrust.html.