Euro to Overcome Current Crisis, China Ambassador Says

Euro to Overcome Current Crisis, China Ambassador Says

Dec 24, 2010 6:53 am ET

(Adds the ambassador’s comments in second paragraph.)

Dec. 24 (Bloomberg) -- The euro will overcome the region’s deficit crisis and support the stability of the international monetary system, said Song Zhe, China’s ambassador to the European Union.

The strengthening of the euro’s status will help “promote the building of a diversified global currency system,” Song said in a statement on the Foreign Ministry’s website yesterday.

Vice Premier Wang Qishan said on Dec. 21 his nation has taken “concrete action” to help the EU address its debt crisis. China is willing to invest 4 billion euros ($5.3 billion) to 5 billion euros in Portuguese government debt in the first quarter of next year, Jornal de Negocios reported on Dec. 16, without saying where it got the information.

The EU is China’s largest trading partner, with bilateral trade increasing 33.1 percent in the 11 months through November from a year earlier to $433.88 billion, China’s customs department said Dec. 10.

The euro gained for the first time in eight days versus Japan’s currency before Dec. 29 reports forecast to show European inflation pressures accelerated last month and German consumer prices rose. The currency climbed 0.2 percent to 108.93 yen.

Europe’s M3 money supply, which the European Central Bank uses as a gauge of future inflation, grew 1.6 percent in November from a year earlier, the most since September 2009, a Bloomberg survey of economists showed. The inflation rate in Germany, calculated using a harmonized European method, increased to 0.9 percent in December, according to a separate Bloomberg survey.

A press official with the State Administration of Foreign Exchange, who declined to be identified because of the agency’s rules, said last week the regulator doesn’t comment on speculation. It hasn’t replied to a fax seeking comment on reports that China plans to buy Portugal’s debt.

--Jiang Jian-Guo, Judy Chen. Editors: Sandy Hendry, Ven Ram

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