China’s foreign minister on Wednesday expressed concern over Europe’s spreading debt crisis but also tried to boost confidence in Europe’s efforts to fix its debt woes even as they threatened to engulf Italy.
“Currently, Europe’s sovereign debt problems are still unfolding. A few countries’ financial markets are still facing turmoil and debt risks are still very prominent,” Chinese Foreign Minister Yang Jiechi said. Italy, the euro zone’s third-largest economy, has become embroiled in the crisis due to its huge public debt, adding to fears of a wider regional emergency which would overwhelm bailout measures created to help troubled smaller countries like Greece. On Tuesday, Italian finance officials held an emergency meeting after concerns over Italy’s public debt sent borrowing costs to record levels. They issued a statement afterwards saying that the financial system was solid.
“China attaches a great deal of importance to the threat that the sovereign debt problem has for Europe’s economy and society, and supports the EU and the International Monetary Fund in adopting proactive measures to revitalize stability and growth,” Yang said. Spain is also under market attack, fueling doubts about the stability of the whole euro zone and any single government’s ability to resolve their debt problems alone. But Yang, who is on a trip to Albania, also sought to calm fears in his response to written questions from Albanian media posted on the Foreign Ministry’s website. China has repeatedly said it has confidence in the euro and in Europe’s ability to deal with the crisis. With a quarter of its reserves parked in the euro, it is in China’s interests to see a healthy and stable EU, and Beijing has tried to foster confidence in the block by buying some euro zone debt this year.
It has promised to continue investing in the region. Yang said China had taken a series of positive steps to help European countries fight the crisis, all of which had been a boon to international financial markets and investor confidence. “China is a responsible investor in international financial markets, maintains its confidence in the euro zone and the euro, and has made Europe one of its most important markets for investment,” Yang said. Yang will travel to Poland before heading to Sudan and the newly founded South Sudan.
