The Chinese ambassador to Europe has said that his country may extend purchases of European government debts in order to promote economic stability in the region despite the sovereign debt crisis, according to The Wall Street Journal. On Thursday, Song Zhe said, Its possible we will purchase more sovereign bonds, explaining, We are hoping to achieve stability in European financial markets. The ambassador to the European Union added, We want to diversify our portfolio, prevent risk, and protect value in foreign exchange.
The envoys message was that Chinas leaders have confidence in the euro currency, having recently bought portions of Spanish and Greek sovereign debt, and Premier Wen Jiabao pledged backing for Spanish public finances and the countrys banking sector. Additionally, companies from China are investing in wide segments of the European economy, and Song said businesses from his country are very occupied with market demand. Jonthan Holslag of the Institute for Contemporary China Studies said the ambassadors message represented a combination of economic, commercial, and political considerations.