China wants to invest in life saving and Europe to keep its holdings in euro assets. So support the growth of the single currency, and shares in Asia, due to optimism that the Eurozone debt crisis will be overcome.
“China has always adhered to the principle of ownership of assets in debt securities of euro area. We participated in resolving the debt crisis in the Eurozone”, said the CEO of the Central Bank.
These words are welcome to finance ministers from Europe, which reinforce the pressure on Greece to cut spending to get a second bailout. China is willing to help stabilize the economy as the Eurozone’s largest export market in the country amid the global slowdown, which in turn negatively affects the growth of the Chinese exports.
The analysts at Mizuho Securities Asia Ltd. commented that the country’s prime minister and governor of the Bank of China currently provide the best support. This is to give positive signals readiness to help Europe to tackle the crisis, and thus will enhance market confidence.
From Mizuho stated that when and how China will buy depends on the currency investment strategy – when it is decided that the price is right.