China reaffirms Europe commitment
By Maggie Zhang and Winny Wang |
May 28, 2010, Friday
|
Print Edition
Print Edition
CHINA'S top currency regulator said yesterday it remained committed to the European market and denied a news report that it was reviewing its euro holdings.
The head of China's US$300 billion sovereign wealth fund also said it would maintain investments in the euro zone despite the Greek debt crisis.
"The report (that China is reviewing its euro assets) is totally groundless," the State Administration of Foreign Exchange said yesterday in a statement on its Website.
"Europe has been and will continue to be one of the major markets for investing China's foreign exchange reserves. China is a responsible and long-term investor in the investment of foreign exchange reserves and we always follow the principle of diversification."
SAFE also said that China was confident that the euro zone would be able to overcome its difficulties, adding that the country supported the actions taken by the International Monetary Fund and the European Union to stabilize financial markets.
The Financial Times reported on Wednesday that the regulator was reviewing its euro region debut holdings and its representatives had met foreign bankers in recent days to discuss the matter.
China's foreign-exchange reserves topped US$2.45 trillion as the end of March, making the country the world's biggest holder.
The euro has tumbled to a four-year low against the US dollar on concerns of economic instability, sovereign risks and a double-dip recession.
The euro, which fell toward a four-year low on Wednesday, jumped to a day's high yesterday, following the SAFE statement.
US stock futures extended gains.
Xinhua news agency yesterday quoted Gao Xiqing, general manager of China Investment Corp, as saying that the Greek crisis has had little impact on company investments.
Speaking in an interview at the 2010 Organization for Economic Cooperation and Development Forum in Paris, Gao said the fund would focus more on long-term trends.
"We can invest in all typesof products and regions exceptfor three industries - weapons of mass destruction, gambling andtobacco," Gao said.
"As a financial investor, we don't have any specific political objectives but we still encounter many obstacles while investing overseas because of some foreign authorities' ignorance," Gao said.
"If they carefully read the information we release or don't have a prejudice against the fund, they will know they needn't fear it."
Domestic economists yesterday found one positive from Greece's woe - it may postpone an interest-rate increase by China.
SAFE said earlier the strength of the US dollar had reduced reserves by US$48 billion in the first quarter.
China has been accumulating foreign exchange reserves at a pace of about US$30 billion per month this year.
Only Europe and the US offered debt markets large enough and liquid enough to absorb that amount of cash, Stephen Green, an economist with Standard Chartered in Shanghai, told Reuters.
"Last year the United States looked creaky," he said. "Now Europe looks creaky.
"As the world's biggest inter-national creditor, China has a problem in a world where debtors are not looking so healthy."
The head of China's US$300 billion sovereign wealth fund also said it would maintain investments in the euro zone despite the Greek debt crisis.
"The report (that China is reviewing its euro assets) is totally groundless," the State Administration of Foreign Exchange said yesterday in a statement on its Website.
"Europe has been and will continue to be one of the major markets for investing China's foreign exchange reserves. China is a responsible and long-term investor in the investment of foreign exchange reserves and we always follow the principle of diversification."
SAFE also said that China was confident that the euro zone would be able to overcome its difficulties, adding that the country supported the actions taken by the International Monetary Fund and the European Union to stabilize financial markets.
The Financial Times reported on Wednesday that the regulator was reviewing its euro region debut holdings and its representatives had met foreign bankers in recent days to discuss the matter.
China's foreign-exchange reserves topped US$2.45 trillion as the end of March, making the country the world's biggest holder.
The euro has tumbled to a four-year low against the US dollar on concerns of economic instability, sovereign risks and a double-dip recession.
The euro, which fell toward a four-year low on Wednesday, jumped to a day's high yesterday, following the SAFE statement.
US stock futures extended gains.
Xinhua news agency yesterday quoted Gao Xiqing, general manager of China Investment Corp, as saying that the Greek crisis has had little impact on company investments.
Speaking in an interview at the 2010 Organization for Economic Cooperation and Development Forum in Paris, Gao said the fund would focus more on long-term trends.
"We can invest in all typesof products and regions exceptfor three industries - weapons of mass destruction, gambling andtobacco," Gao said.
"As a financial investor, we don't have any specific political objectives but we still encounter many obstacles while investing overseas because of some foreign authorities' ignorance," Gao said.
"If they carefully read the information we release or don't have a prejudice against the fund, they will know they needn't fear it."
Domestic economists yesterday found one positive from Greece's woe - it may postpone an interest-rate increase by China.
SAFE said earlier the strength of the US dollar had reduced reserves by US$48 billion in the first quarter.
China has been accumulating foreign exchange reserves at a pace of about US$30 billion per month this year.
Only Europe and the US offered debt markets large enough and liquid enough to absorb that amount of cash, Stephen Green, an economist with Standard Chartered in Shanghai, told Reuters.
"Last year the United States looked creaky," he said. "Now Europe looks creaky.
"As the world's biggest inter-national creditor, China has a problem in a world where debtors are not looking so healthy."
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