China’s vice foreign minister on Friday ruled out using the nation’s vast foreign exchange reserves to bail out Europe, as the debt-laden continent tries to stave off the risk of a massive default.
“The argument that China should rescue Europe does not stand,” vice foreign minister Fu Ying told an EU-China forum.
“We cannot use foreign reserves for… rescuing foreign countries. We need to ensure safety, liquidity and profit for the foreign reserves.”
European leaders have lobbied China, the world’s second largest economy, to help struggling eurozone countries by contributing to a bailout fund, but so far Beijing has not made a firm commitment.
The Asian powerhouse, which has the world’s largest foreign exchange reserves at $3.2017 trillion, has said it is keen to seek more investment opportunities in Europe, but has held back from agreeing to contribute to the fund.
Fu pointed to China’s purchase of European bonds, increased imports and expanded investment in the continent, which would “create jobs and restore growth”.
But she insisted China was not seeking to use its considerable financial clout to exert power over the continent.
“China is no old-fashioned power or empire. China has no intention of seeking power through financial means,” she said.
China’s commerce minister Chen Deming said last month Beijing would lead an investment delegation to Europe next year, and the head of China’s sovereign wealth fund has said it is keen to invest in European infrastructure.
But some in Europe have expressed concern about the potential cost of accepting Beijing’s help.
In October, Francois Hollande, the Socialist candidate for next year’s French presidential elections, asked if China was really “riding to the rescue of the euro… without making any demands in return?”
Fu also reiterated China’s confidence in Europe, just as European leaders prepare to meet at a summit next week that some have billed as their last chance to restore the credibility of eurozone economic governance.
“We have reason to believe that Europe has the wisdom, capacity and resources to make it this time by accelerating adjustment and reform,” she said.