China PBOC Says Supports Euro: EMU Bonds Offer Good Returns
BEIJING (MNI) - A senior central bank official offered China's latest vote of confidence for the eurozone Friday, arguing that euro-denominated sovereigns offer sound returns and reiterating the importance that the single currency union plays in Chinese foreign exchange reserve management.
"The euro and European financial markets are an important part of the international financial system. They were, they are, and they will be one of the important fields for Chinese foreign exchange reserve investment," said Yi Gang, a deputy-central bank governor and the director of the State Administration of Foreign Exchange.
"Investing in eurozone government bonds with foreign exchange reserves will not only help maintain European financial stability and international financial stability but will secure a reasonable investment return and help to ensure the safety of our foreign exchange reserves," Yi said in a statement posted on the People's Bank of China website.
Yi, who is accompanying Vice Premier Li Keqiang on a visit to Spain, Britain and Germany, noted that China's leaders have repeatedly told European and European Union leaders of Chinese support for measures taken by the union and International Monetary Fund to solve their debt crises.
He also noted that Chinese officials have said that they will not cut their euro bond holdings, and that they support the stability of the euro.
Spanish newspaper El Pais reported Thursday that China had agreed to buy E6 billion of Spanish government debt in the period ahead.
The pledge was made as part of Chinese Vice-Premier Li Keqiang's visit to Spain. Li told Finance Minister Elena Salgado Wednesday that China will continue to buy Spanish debt based on economic conditions.
The report said that China is willing to buy as much Spanish debt as its combined purchases of Greek and Portuguese bonds.
Portuguese media reported in December that China told visiting European officials of a willingness to buy E4 to E5 billion in Portuguese sovereign bonds.
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