China prepared to support eurozone countries hit by financial crisis

Thursday, December 23, 2010

China has said it is prepared to support eurozone countries during the financial crisis that has hit the sixteen member states. The country’s foreign ministry spokesperson Jiang Yu said: “We are ready to support the eurozone to overcome the financial crisis and realise economic recovery.”

Several of the eurozone’s member states have been impacted with increasing debt levels. The International Monetary Fund (IMF) and European Union (EU) have signed deals to hand a €110bn aid package to Greece, and an €85bn rescue package to Ireland. Industry commentators have said there are fears Portugal and Spain may soon also have to accept assistance from the IMF.

Jiang said China had an interest in supporting the region, saying eurozone member states would, in the future, become “a major market” for Chinese foreign exchange investments. China reportedly has massive reserves of foreign currency, mostly made up of United States dollars. Analysts have suggested China plans to purchase more euros in the future. Other reports suggest China is preparing to buy between four and five billion euros to help Portugal fend off pressure in bond markets.