From Marketwatch: Speculation that China may help rescue peripheral European debt markets from oblivion is consistent with Beijing’s strategic interests in the region and a prudent back-stopping of its euro-denominated investments, analysts say.
Reports on Monday from The Wall Street Journal and Financial Times said Italy’s finance minister met last week with a delegation of Chinese officials — including the head of China’s sovereign wealth fund — in an attempt to persuade Beijing to buy a large amount of Italian sovereign debt. Read WSJ.com report on China-Italy meeting.
Asia analysts said Tuesday that the reports had the ring of credibility, as a Chinese bailout of peripheral euro-zone nations would boost Beijing’s stature within Europe while also helping to shore up one of the few markets that offers a viable alternative to the U.S. dollar..
Beijing is concerned “about the value of their existing [euro] holdings, so if they can provide some support, that will lessen the negative impact upon their portfolios,” said Jackson...
Read all about it at http://www.marketwatch.com/story/china-sees-europe-as-too-important-to-fail-2011-09-13
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