💾 Archived View for gmi.noulin.net › mobileNews › 2379.gmi captured on 2023-09-08 at 18:33:03. Gemini links have been rewritten to link to archived content
⬅️ Previous capture (2023-01-29)
-=-=-=-=-=-=-
2010-10-03 05:58:14
By Ingrid Melander and Harry Papachristou Ingrid Melander And Harry
Papachristou Sat Oct 2, 3:34 pm ET
ATHENS (Reuters) China offered on Saturday to buy Greek government bonds when
Athens resumes issuing, in a show of support for the country whose debt burden
pushed the euro zone into crisis and required an international bailout.
Premier Wen Jiabao made the offer at the start of a two-day visit to Greece,
his first stop on a tour of Europe, and also said he wanted to boost shipping
and trade ties with Athens, underscoring Beijing's use of economic strength to
win friends.
"With its foreign exchange reserve, China has already bought and is holding
Greek bonds and will keep a positive stance in participating and buying bonds
that Greece will issue," Wen said, speaking through an interpreter.
"China will undertake a great effort to support euro zone countries and Greece
to overcome the crisis."
Wen and his Greek counterpart George Papandreou said in a statement the world's
nations need to coordinate their economic policies for global recovery to find
a sure footing.
"The global economy shows signs of gradual recovery but many uncertainties
remain," the two leaders said in the statement, issued on Saturday by
Papandreou's office after the two men met in Athens.
In addition to seeing economic opportunities in Greece, China may calculate its
support of a struggling European country will help deflect international
criticism of its trade policies and its refusal to let its yuan currency
appreciate sharply.
Wen did not specify how much Greek debt China would be willing to buy or which
Chinese entities would buy the bonds.
Chinese state entities have been generally conservative about investing in
foreign financial markets and the Chinese government faces domestic political
criticism over losses incurred by these entities during the global financial
crisis.
HIGH BORROWING COSTS
A senior Greek government official said Wen made clear his offer concerned
buying bonds only when the country returned to markets.
Greece, which is currently funded through a 110 billion euro ($150 billion) EU/
IMF bailout, is only issuing short-term T-bills for the time being.
Since the true scale of its debt burden emerged late last year, investors have
shunned its bonds. The yield they demand to hold 10-year Greek debt has shot up
to 10 percent, compared with just 2.3 percent for similar bonds from the euro
zone's biggest economy Germany, making it too expensive for Greece to seek
long-term funding in international markets.
It has said it wants to return to markets some time next year to sell
longer-term debt.
China, at loggerheads with the United States over the yuan and likely to face
similar complaints during this European tour, emphasized its willingness to
cooperate with the 27-nation EU on financial issues.
"China is prepared, hand in hand with the EU, as passengers in the same boat,
to strengthen cooperation ... to confront the financial crisis," Wen said. "I
believe that we can undertake a genuine effort to promote the reform of the
international financial system and strengthen its supervision," he said.
Neither Wen nor Greek Prime Minister George Papandreou mentioned the Chinese
currency at the news conference.
SHIPPING FUND, TRADE, EXPORTS
Wen said China wanted to boost cooperation with Greece -- which faces its worst
recession in decades as it struggles with its debt -- on all fronts, including
by setting up a shipping fund and doubling bilateral trade to $8 billion by
2015.
"China will set up a special Greek-Chinese shipping development fund for Greek
shipowners on which it will invest, in an initial phase, $5 billion," Wen told
the news conference. "The aim is to offer Greek shipowners a basket of
financial support to buy Chinese-made vessels."
Greece and China pledged to stimulate investment in a memorandum of
understanding and private companies signed a dozen deals in areas like
shipping, construction and tourism.
With the global economic crisis and competition with other Balkan countries
increasing, foreign direct investment in Greece fell from 6.9 billion euros in
2006 to 4.5 billion in 2009, according to Investment Ministry figures.
Chinese investment represents a very minor proportion of this, excluding a
35-year concession deal China's Cosco signed in 2008 to turn the port of
Piraeus into a regional hub for a guaranteed amount of 3.4 billion euros,
according to port authority figures.
The investment memorandum does not target specific investment volumes, an
official close to Investment Minister Harris Pamboukis said ahead of Wen's
visit.
"We want to build this strategic partnership with China," the investment
ministry official said. "The purpose is not a signature on something big."
Wen will address the Greek parliament on Sunday and leave early on Monday for
Brussels, where he will attend an EU-China summit before going on to Germany,
Italy and Turkey.
Clinching business deals with countries such as China and Qatar would help
boost confidence among Greek consumers and businesses, economic analysts said.
(Additional reporting by Deborah Kyvrikosaios and George Georgiopoulos; Writing
by Ingrid Melander; Editing by Charles Dick/Ruth Pitchford)