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China says ready to help solve EU debt crisis

world Updated: Feb 14, 2012 22:46 IST

AFP
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China's Premier Wen Jiabao on Tuesday said his country was ready to increase its participation in efforts to resolve Europe's debt crisis, after holding talks with EU leaders in Beijing.

Wen also said China wanted to see Europe -- its biggest trading partner -- "maintain stability and prosperity", a day after ratings agency Moody's downgraded Italy, Spain and Portugal.

"China is ready to increase its participation in resolving the EU debt problems," the Chinese premier told journalists after meeting EU president Herman Van Rompuy and European Commission president Jose Manuel Barroso.

Wen did not elaborate on how China would participate, but earlier this month he said Beijing was considering offering help through the International Monetary Fund or bail-out funds.

China has made clear its growing concerns over the crisis in Europe, repeatedly urging EU leaders to get a grip on the situation, which the foreign ministry said this week had reached a "critical juncture".

European leaders last year approached China, which holds the world's largest foreign exchange reserves, to invest in a bail-out fund to rescue debt-stricken states, but it has made no firm commitment so far.

"Helping stability in the European market is actually helping ourselves... We have to keep import and export policies stable," the Chinese premier said after talks with the visiting German Chancellor Angela Merkel earlier this month.

Chinese media had speculated Beijing would make its position clearer at the summit, which began today and was expected to be dominated by the crisis in Europe.

"The times we are living in are challenging and it is of utmost importance the European Union and China advance our common agenda and address global problems," Van Rompuy told Wen during the summit.

"We became so interdependent that change in the growth rate in one of the two strategic partners has a direct and palpable impact on the other one. Our economic destinies are interlinked."

The IMF warned last week that an escalation of the EU debt crisis could slash China's economic growth in half this year.