China to keep investing in euro zone debt: China c.bank

Wed Feb 15, 2012 6:02am EST
 
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By Aileen Wang and Nick Edwards

BEIJING (Reuters) - China will continue to invest in euro zone government debt and it remains confident in the euro, the country's central bank governor said on Wednesday, while calling on Europeans to produce more attractive investment products for China.

Zhou Xiaochuan admitted that China and other emerging nations like Brazil, Russia or India were waiting for the right time to help the bloc, after a European Union state visit was once again met with encouraging words but no concrete public commitments on fresh funding from China.

But he also suggested Europe needed to work harder to entice Beijing to part with its capital.

"We also hope that the euro zone and EU can innovate their mechanisms to offer new products that are more helpful for Sino-Europe cooperation," he said.

The central bank governor reiterated previous comments from Premier Wen Jiabao that China was ready to play a bigger role in solving Europe's debt problems, noting China had not cut its reserves exposure to the euro zone.

"At the G20, our state leaders promised European leaders that, amid the global financial crisis and the Europe sovereign debt crisis, China will not cut the proportion of euro exposure" in its reserves, Zhou said in a speech at the University of International Business and Economics in Beijing.

"Some people had cast doubt or suspicion over the currency, but for the People's Bank of China, we have always been confident in the euro and its future," he added.

Although Zhou's comments largely underlined China's established stance, the remarks helped push the euro higher and were cited in markets for supporting stocks buying in Asia.   Continued...

 
China's nation flag flies in front of the headquarters of the People's Bank of China, the central bank, in Beijing November 30, 2011. REUTERS/Soo Hoo Zheyang