China to buy 6.0 bn euros of Spanish debt: report

Chinese Vice Premier Li Keqiang has said Beijing is willing to buy about six billion euros’ worth of Spanish public debt, Spanish newspaper El Pais reported on Thursday, citing government sources.

Li told Spanish Prime Minister Jose Luis Rodriguez Zapatero during a meeting in Madrid on Wednesday that China “was willing to buy as much Spanish debt as its Greek and Portuguese debt holdings combined, that is some six billion euros ($7.9 billion),” it said.

The newspaper could not confirm the figure with Li but spoke to China’ Vice Minister of Commerce Gao Hucheng who said that any transaction would be determined according to the date and size of any public debt issue.

In an op-ed piece in El Pais on Monday, one day ahead of his arrival in Madrid for a three-day official visit, Li said China was confident Spain would recover from its economic crisis and would continue to buy Spanish government bonds, without specifying a figure.

“We have confidence in the Spanish financial market, which has been translated into the acquisition of its public debt, something we will continue to do in the future,” he said.

Spain was the first stop of Li’s three-nation tour of Europe that will also include Germany and Britain.

Li, who is considered next in line to replace Chinese Premier Wen Jiabao, will visit Germany between January 6-9 and Britain between January 9-12.

Zaparero’s Socialist government has slashed spending and raised taxes to rein in a ballooning public deficit and ease market fears that Spain will need an EU bailout like the ones granted Ireland and Greece last year.

It has vowed to lower the public deficit from 11.1 percent of economic output in 2009 to an EU limit of 3.0 percent by 2013.