China willing to buy more Spanish debt: Wen

12th April 2011, Comments 0 comments

Chinese Premier Wen Jiabao on Tuesday told visiting Spanish Prime Minister Jose Luis Rodriguez Zapatero that Beijing was ready to buy more Spanish public debt, voicing confidence in Europe's recovery.

Zapatero was in Beijing at the start of a trip to China and Singapore aimed at securing new investments to shore up Madrid's economy, as it tries to avoid a European Union bailout like those granted to Ireland and Greece last year and offered to Portugal.

"China is willing to continue to buy the national debt of Spain," Wen said in comments released by the foreign ministry.

"China is a responsible and long-term investor in the European financial market, and supports the relief measures by the EU and the International Monetary Fund," the Chinese premier said.

"I am convinced that Europe will certainly realise its stable economic and social development."

Zapatero said China's support had helped to "strengthen Spain's confidence and ability to overcome difficulties" and had been an asset to Europe's overall economic stability.

His Socialist government has slashed spending and raised taxes to rein in Spain's ballooning public deficit, and China's help could bolster that effort.

Chinese Vice Premier Li Keqiang reportedly offered to buy about 6.0 billion euros worth of Spanish public debt during a visit to Spain in January, though Beijing has never revealed the total amount of its investment.

Concerns that eurozone debt troubles could spread to Spain pushed bond rates sharply higher last year, adding to the costs of servicing the country's sovereign debt.

But such fears appear to have eased since then as Madrid strengthened bank balance sheets, cut spending and pursued economic reforms.

The Spanish prime minister was due to give a press conference in Beijing on Wednesday before heading to Singapore, where he will hold talks with Prime Minister Lee Hsien Loong and investors.

Zapatero will then head back to China for the Boao Forum for Asia, an annual conference bringing together current and past government leaders, top businessmen and academics, before heading home on Friday.

© 2011 AFP

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