China promises to buy Spanish debt to help EU overcome crisis

Mon, 03 Jan 2011

Madrid - China will continue buying Spanish public debt as a sign of trust in the country's economic recovery, Chinese Vice Premier Li Keqiang said Monday on the eve of a key visit to Spain.

China supported the measures adopted by Spain to stabilize and strengthen its economy, Li wrote in an article published by the Madrid daily El Pais.

"We trust Spain's financial market, which has been expressed through the acquisition of its public debt, an action we will maintain in the future," Li wrote.

China's ambassador to Madrid Zhu Bangzao said Beijing wanted to play a "key role" in helping Spain and other European Union countries to deal with their financial crisis and to regain market confidence.

However, Zhu did not say how much Spanish debt China had already acquired. The ambassador made the comments to the Chinese news agency Xinhua in an interview quoted by Spanish and Portuguese news agencies.

Li is scheduled to arrive in Madrid on Tuesday. Spain will be the first stop on a European tour which is also to take him to Germany and Britain.

Madrid and Beijing were expected to seal business deals in sectors including banking and energy, as well as institutional agreements to favor cooperation in sectors such as renewable energies.

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

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/360505,help-eu-overcome-crisis.html.