Chinese backing?
October 31, 2011
China's President Hu Jintao said he is confident Europe can solve its crippling debt crisis, though he stopped short of pledging Chinese financial support for eurozone countries.
"We are convinced that Europe has the wisdom and the competence to conquer its momentary difficulties," Hu said at the start of his official visit to Austria on Monday.
European leaders hope that the economic superpower will use some of its huge cash reserves to prevent the debt crisis from worsening. Greece, Ireland and Portugal have had to seek assistance from the eurozone's rescue fund, in the form of massive bailouts. Leaders are anxious to prevent the much bigger economies of Italy and Spain from being forced down the same path.
The Chinese government has promised to help by continuing trade with Europe, and buying up some of the safest European government bonds.
Seeking investment
Head of the EFSF, Klaus Regling, visited Beijing last week to talk to potential investors. He was reportedly seeking a pledge of some $100 billion (71 billion euros). However, the Chinese government remained non-committal about its involvement in helping Europe out of its crisis. Finance Minister Zhu Guangyao played down hopes of a breakthrough at the G20 meeting in France on Thursday and Friday this week, insisting that investment in the European bailout fund was not on the agenda.
Hu will also be attending the summit, to be held in the French resort of Cannes. The talks of the group of 20 leading economies are expected to focus on the eurozone debt crisis.
Last week, eurozone leaders pledged to expand the bloc's bailout fund, the European Financial Stability Facility (EFSF). Leaders appealed to non-European investors to help fund a special investment vehicle that would act alongside the EFSF. That investment vehicle could support the EFSF by buying up bonds or recapitalizing banks in struggling eurozone countries. The details have yet to be finalized.
State visit
Hu's official visit to Austria got underway on Monday, when he held talks with Austrian President Heinz Fischer. Hu and his wife were welcomed to the former Imperial Palace, the seat of the presidency, with full military honors. In the evening, they were due to attend a state banquet and meet Austrian Chancellor Werner Faymann.
Foreign trade between China and Austria amounted to 8.2 billion euros in 2010, and Fischer said Monday he hoped it would double within the next five years.
On Tuesday, Hu will be taken on a sightseeing tour of the country, taking in a short lake cruise in St Gilgen, and a trip to Salzburg to attend a concert in the former home of composer Wolfgang Amadeus Mozart.
Author: Joanna Impey (AFP, AP, Reuters)
Editor: Nancy Isenson