EU Bailout Fund Chief in China to Explain New Rescue Fund

Posted October 28th, 2011 at 6:30 am (UTC-5)
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The head of the eurozone’s bailout fund arrived in China Friday to discuss a possible deal with Beijing policymakers to use some of China’s huge foreign exchange reserves to invest in the multibillion fund.

Klaus Regling’s visit to the Chinese capital comes a day after European leaders reached a deal to increase the eurozone bailout fund to $1.4 trillion to help nations such as Greece, Italy and Spain to remain solvent and avoid sending the global economy back into recession.

Regling is holding talks with officials of China’s finance ministry and central bank during his visit. He says Beijing is searching for “attractive, solid, safe investment opportunities” for its $3.2 trillion in foreign reserves, but insists there is no imminent deal on the table.

Chinese vice finance minister Zhu Guangyao said authorities confirmed Regling’s stance, telling reporters that policymakers want to see how the expanded European Financial Stability Facility will work before Beijing decides whether it will invest in it.

China has already invested significant sums in European bonds, but has urged the continent to address its financial woes on its own and not look to China to solve the problem.