Reserves not for rescuing Europe, diplomat says
December 3, 2011, Saturday
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CHINA cannot use its foreign exchange reserves of about US$3.2 trillion to rescue other countries, a senior diplomat said yesterday.
"The argument that China should rescue Europe does not stand, as reserves are not managed that way," said Vice Foreign Minister Fu Ying at the Lanting Forum held by the Ministry of Foreign Affairs.
"China is not absent from the international efforts to rescue Europe; it has been a positive and healthy participant," she told the forum in Beijing.
Since the outbreak of the European financial crisis, China has sent more than 30 procurement delegations to Europe, leading to more Chinese imports from the continent, Fu said. She added that there are many misunderstandings about the use of China's foreign reserves.
"Foreign reserves aren't domestic income or money that can be disposed of by the premier or finance minister," she said. "Foreign reserves are akin to savings, and their liquidity should be ensured."
She said China learned a lesson from the Asian financial crisis in the late 1990s of how important foreign reserves are to a nation. "Reserves cannot be used domestically to alleviate poverty or taken abroad for development support," Fu said.
She stressed that the way the foreign reserves are managed should be in line with the principles of "safety, liquidity and proper profitability."
"China's purchases of European bonds, International Monetary Fund bonds and US bonds are also based on those principles," Fu said.
On a related matter, Fu said that China-Europe cooperation is mutually beneficial but suggested there could be improvements. She was disparaging of a recent trend emanating out of the global financial crisis in the "Western community" that politicized issues concerning China.
"Many European countries show their understanding and support to us, while there were still some negative reports," Fu said.
"We should treat each other with a moderate and impartial mentality. That will make the bilateral relations easier to handle," she said.
She cited an investment bid by a Chinese company in Iceland that was turned down by the country's government.
"The argument that China should rescue Europe does not stand, as reserves are not managed that way," said Vice Foreign Minister Fu Ying at the Lanting Forum held by the Ministry of Foreign Affairs.
"China is not absent from the international efforts to rescue Europe; it has been a positive and healthy participant," she told the forum in Beijing.
Since the outbreak of the European financial crisis, China has sent more than 30 procurement delegations to Europe, leading to more Chinese imports from the continent, Fu said. She added that there are many misunderstandings about the use of China's foreign reserves.
"Foreign reserves aren't domestic income or money that can be disposed of by the premier or finance minister," she said. "Foreign reserves are akin to savings, and their liquidity should be ensured."
She said China learned a lesson from the Asian financial crisis in the late 1990s of how important foreign reserves are to a nation. "Reserves cannot be used domestically to alleviate poverty or taken abroad for development support," Fu said.
She stressed that the way the foreign reserves are managed should be in line with the principles of "safety, liquidity and proper profitability."
"China's purchases of European bonds, International Monetary Fund bonds and US bonds are also based on those principles," Fu said.
On a related matter, Fu said that China-Europe cooperation is mutually beneficial but suggested there could be improvements. She was disparaging of a recent trend emanating out of the global financial crisis in the "Western community" that politicized issues concerning China.
"Many European countries show their understanding and support to us, while there were still some negative reports," Fu said.
"We should treat each other with a moderate and impartial mentality. That will make the bilateral relations easier to handle," she said.
She cited an investment bid by a Chinese company in Iceland that was turned down by the country's government.
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