WSJ: China cautiously vows eurozone aid

30 August 2012

China pledged to continue to buy European bonds in a bid to help the eurozone resolve its debt crisis, Chinese Premier Wen Jiabao said after meeting with visiting German Chancellor Angela Merkel, underscoring Europe's growing importance to the Chinese economy.

Mr Wen expressed worries over Europe's debt troubles at a news conference jointly held with Ms Merkel, on her second trip to China this year to assuage Chinese fears about eurozone sovereign debt crisis and to boost economic ties. "The European debt crisis recently has continued to deteriorate, giving rise to serious concerns in the international community", Mr Wen said. "Frankly, I'm also worried." He pointed to uncertainty over whether Greece will leave the eurozone and whether Italy and Spain will take "comprehensive rescue measures" including budget cuts. The key to resolving the debt crisis lies with "striking a balance" between fiscal tightening and economic stimulus, he said.

As Europe's crisis persists, China increasingly sees Germany—its largest European trading partner—as a vital player in pulling the continent out of its slump, analysts say. Mr Wen said his talks with Ms Merkel on Thursday have made him "more confident" in Europe's ability to resolve the crisis.  Ms Merkel said: "I want Greece to remain part of the eurozone" and efforts by countries including Italy and Spain will "bear fruit".

Full article

© Wall Street Journal