China's Hu says Europe must solve crisis

3rd November 2011, Comments 0 comments

Chinese President Hu Jintao told his French counterpart Nicolas Sarkozy that Europe was mostly responsible for resolving the debt crisis in talks ahead of the G20 summit, state media said Thursday.

China, the world's second-largest economy and a major holder of European bonds, has repeatedly called on EU leaders to put their financial houses in order while resisting pressure to bail out its debt-laden trading partners.

"It has to be depended mainly on Europe to resolve the European debt problem," Hu told Sarkozy in the French resort of Cannes ahead of the G20 leaders meeting on Thursday and Friday, the official Xinhua news agency said.

"We believe that Europe has all the wisdom and capability to resolve the debt problem."

The Chinese leader arrived in Cannes on Wednesday after paying a two-day state visit to Austria. Hu also held talks with Christine Lagarde, the managing director of the International Monetary Fund, Xinhua said.

European leaders called on China last week to invest in the region's European Financial Stability Facility to help it overcome the debt crisis.

The head of the bailout fund, Klaus Regling, travelled to Beijing last Friday for talks about a possible contribution, but China has so far made no firm commitment to provide financial assistance for the troubled eurozone.

Foreign ministry spokesman Hong Lei on Wednesday reiterated Beijing's support for Europe and said China was "ready to explore ways to fight against the (debt) crisis".

"China has been and will continue to be a major investor in the EU market," Hong told a regular briefing.

China's $3.2 trillion dollars in foreign exchange reserves have put it in a position of strength to help Europe, but it also faces huge domestic challenges.

These include stubbornly high inflation, an economy that is excessively dependent on exports, and 150 million people -- almost half the eurozone population -- still living in poverty.

© 2011 AFP

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