China’s Wen Jiabao says euro investment continues


BBC News | 16 July 2010 | 11:42 GMT

Angela Merkel and Wen Jiabao The Chinese Premier, Wen Jiabao, has said that China will continue to invest in European markets, despite the debt problems affecting many eurozone countries. He was speaking in Beijing alongside the German Chancellor, Angela Merkel. She described his pledge as an important signal that China has confidence in the euro. British Foreign Secretary William Hague also met Mr Wen this week and called for closer investment ties. Mrs Merkel is in China with a delegation of German business leaders. She called for greater openness in the Chinese economy, saying that German companies would like to have the same level of access to China that Chinese firms already enjoy in Germany.

Strong signal

Mrs Merkel said she had used her meetings with the Chinese to press them to open their economy further to foreign companies. The pledge from the Chinese premier that China would continue to invest its reserves in European markets – now and in the future – was an important signal, the German chancellor said, that China had confidence in the euro. That confidence has been shaken by the European sovereign debt crisis. Europe is a key export market for Chinese manufacturers. They are concerned that Europe’s problems could reduce demand for their goods, just as their own businesses start to recover.  

China has signed deals worth hundreds of millions of dollars with Greek shipbuilding and construction firms to help Greece overcome its debt crisis. Mrs Merkel said she had emphasised to Mr Wen Germany’s desire to see China introduce greater openness into its economy. Mr Wen also said China would stick with policies that cooled economic growth in China in the last quarter. Figures released on Thursday showed that Chinese GDP growth slipped from 11.9% to 10.3% in the last three months.

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