EU bailout fund chief looks to China for help

Klaus Regling, Chief executive of the European Financial Stability Fund, ins in China to talk to potential investors.

Story highlights

  • Klaus Regling is holding discussions with potential investors to help ease the European debt crisis
  • He declined to say how much the Chinese have invested in the EFSF
  • China expresses its support for Europe but only promised to resume trade and investments in safe European bonds
  • China's economy has experienced a slump as a result of economic turmoil in the West
Europe's bailout fund chief arrived in Beijing on Friday to hold discussions with potential investors looking for assistance to help ease its debt crisis that has threatened global economic stability.
Klaus Regling, chief executive of the European Financial Stability Facility (EFSF), said he expected to meet with officials of China's Ministry of Finance and the People's Bank of China.
"It's useful to come so soon after the end of the summit of the EU and to inform the officials in Beijing about the outcome of the summit," he told the press in Beijing.
"It does not mean I expect any precise outcome of our talks. There are no negotiations going on. These are regular consultations at early phase and there will be no conclusions during our visit."
He declined to say how much the Chinese have invested in EFSF. He also declined to answer questions on whether China has raised pre-conditions in exchange for extending financial help. He said he is not in China as an EU official.
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Regling's visit comes a day after European countries reached a deal to tackle the debt crisis with a proposal that would give Greece additional bailout support and other measures aimed to boost market confidence.
Chinese President Hu Jintao and his French counterpart Nicolas Sarkozy talked on Thursday by phone about further economic cooperation, but did not discuss any plans for a bailout.
China has expressed its support for Europe amid the crisis, but has only promised to help by resuming trade and investments in safe European bonds. In September, China's Commerce Ministry said it is concerned the crisis could lead to trade frictions.
Commenting on the newly-reached deal Foreign Ministry spokeswoman Jiang Yu said Thursday: "We hope the bailout deal will be conducive to bolstering market confidence, promoting the sustainable economic development of the Eurozone and the process of European integration."
As the world's second-large economy, China has said Europe's failure to address its sovereign debt crisis could hurt China-EU trade relations.
China has long pushed to be recognized as a market economy by the EU, but many European businesses still complain of unfair trade barriers such as restricted access to Chinese government tenders, investment limitations and intellectual property violations.
China's economy has also experienced a slump as a result of economic turmoil in the West. In September, China's trade growth slowed as exports increased by their slowest pace in seven months and imports slowed from a month earlier.
Still, Regling sees good reasons why China would be interested in EFSF bonds.
"China must invest every month because its current account has surplus, the foreign exchange reserve of China goes up every month," he said.
"They are interested in finding effective, solid and safe investment opportunities and I'm happy that the euro bond can be considered in that category. I am optimistic we will have a longer term relationship because we will continue to provide safe, effective investment opportunities."