Sarkozy, Trichet hail Chinese support for EU bailout fund

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Austrian President Heinz Fischer, right, and his Chinese counterpart Hu Jintao, left, address a news conference after their talks at the Hofburg palace in Vienna, Austria, on Monday, 31 October, 2011. Hu is in Austria for a four day state visit. Photo - Ronald Zak/AP

The outgoing president of the European Central Bank has welcomed Chinese initiatives to help boost the European rescue fund and termed it an absolutely normal move that will stabilise ever-volatile European markets.

Beijing’s pledge to buy billions of euros of European debt has thrown a vital lifeline to the eurozone and boosted its bid to keep the single currency project alive.

Reports say Klaus Regling, chief executive of the European Financial Stability Facility (EFSF), is in Beijing where Chinese leaders have assured their support worth around $100bn to eurozone.

The remarks made by the ECB chief echo the sentiments aired by French President Nicolas Sarkozy who has said people should feel relaxed about China taking part in future EU bail-outs.

“If the Chinese, who have 60 percent of global reserves, decide to invest in the euro instead of the dollar, why refuse? … Our independence will in no way be put into question by this,” the French leader said during a TV interview in Paris soon after the EU crisis summit last week.

“Why would we not accept that the Chinese have confidence in the eurozone and deposit a part of their surpluses in our funds or in our banks?” Sarkozy remarked while addressing critics who warned about the price Europe would have to pay for Chinese support.

CHINESE ARRIVAL

European leaders welcomed the arrival of Chinese President Hu Jintao to attend the crucial G20 meeting that will take place in the French resort city of Cannes on 3 November.

The Chinese leader made his second official trip to Europe this year to meet his European counterparts and alleviate eurozone sovereign debt crisis by investing in the rescue fund.

Signalling an era of cooperation between China and Europe, Chinese President Hu Jintao committed further investment in the continents turbulent markets and lend support to eurozone economic system.

“We are following the economic development under the current difficulties with attention,” Hu told reporters after meeting Austrian counterpart Heinz Fischer on a state visit.

“We are convinced that Europe has the wisdom and has the competence to overcome the current difficulties,” the Chinese statesman added, who will attend a summit of Group of 20 (G20) leading economies in France later this week.

TRADE NOT AID

As Chinese President Wen Jiabao sets his eyes on the all important G20 summit that will focus on eurozone sovereign debt crisis, Chinese state media and academics are warning that Beijings efforts to boost Eurozone must not be seen as an act of charity.

“Emerging economies should not be seen as the EU’s Good Samaritans,” the Xinhua news agency said in an editorial. Wang Jian, the head of the National Development and Reform Commission think-tank, told Dow Jones that China is not a “global saviour”.

Another top Chinese academic shared the same concerns. “The last thing China wants is to throw away the country’s wealth,” Chinese central bank-linked academic Li Daokui told the Financial Times.

Despite unwavering support to the EU, Beijing is wary of the criticism mounted by Western nations that accuse the Communist nation of manipulating global economy with an artificially priced currency and having a poor human rights record.

Sources: BBC, Edmonton Journal, EU Observer

(Written and edited by Moign Khawaja)

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