Feb. 15 - Beijing says it will keep investing in euro zone government bonds, but only when the time is right. Arnold Gay reports.
The euro jumped to an intraday high in Asian trade, after China pledged to continue investing in euro zone government debt. Chinese Central Bank Governor Zhou Xiaochuan made the assurance to European Council President Herman Van Rompuy and European Commission President Jose Manuel Barroso, who are in Beijing for the China-EU Summit. Zhou says China has not cut its exposure to the euro zone, but admits Beijing is waiting for the right time to invest more, when certain conditions have been reached. (SOUNDBITE) (Mandarin) CHINESE CENTRAL BANK GOVERNOR, ZHOU XIAOCHUAN SAYING: "G20 members, including the BRICS countries, have all expressed a wish to positively participate in helping the related actions on the euro zone. But of course, some specific measures have not specifically reached that level, but the desire has always been clear." Zhou also thinks Europe must make its investments more attractive to China. Chinese leaders have welcomed a fiscal agreement that will build up a massive fund to backstop European debt, but are alarmed at protests and strikes sweeping Europe. In response, EU Council President Van Rompuy assured Beijing the political will to keep the euro zone intact is strong. (SOUNDBITE) (English) EUROPEAN COUNCIL PRESIDENT, HERMAN VAN ROMPUY SAYING: "So don't underestimate the strong political will to defend the euro zone, and that's the message we want to convey. And I know that in the press and in our meetings we have to deal with rescue funds. with the various mechanisms with the private sector involvement and all those things. And it's important. And we welcome that China will cooperate with us in this huge effort." With $3.2 trillion dollars worth foreign exchange reserves at hand, China is seen as having the financial firepower to bail out some European governments. But Beijing has been reluctant to make firm financial commitments. Arnold Gay, Reuters.