China Premier Wen Jiabao vows to help on eurozone debt

China's Premier Wen Jiabao: ''We are facing enormous challenges''

China has promised to help resolve the eurozone's debt crisis, after talks with EU leaders in Beijing.

Premier Wen Jiabao offered co-operation to help stabilise debt-ridden EU nations, but made no specific promise to invest in a European bailout fund.

EU leaders have been seeking Chinese money to help bolster a planned fund of about 500bn euros ($665bn; £420bn).

In another sign of the EU's troubles, credit-rating agency Moody's earlier downgraded Spain, Italy and Portugal.

Moody's also downgraded the credit outlook for France, the UK and Austria.

The crisis in eurozone counties has intensified in recent days.

Greece passed a package of severe cuts late on Sunday, demanded by the EU and IMF in return for a 130bn euro bailout.

But the austerity measures have proved deeply unpopular and caused riots in Athens.

No commitment

Europe is China's biggest trading partner, with trade worth 560bn euros flowing between the two last year.

European leaders have long courted Chinese investment in their bailout fund.

Analysis

Mr Van Rompuy said he would like European companies to have better access to Chinese markets. He also wants European concerns about protectionism addressed. But he's not in a great bargaining position.

Although the sense of crisis that caused him to postpone this trip last October has abated somewhat, the economic situation in Europe is worsening. New figures show joblessness at a euro-area high. Factory output is still falling. Tomorrow, euro finance ministers are due to meet to discuss their most immediate problem - whether Greece should receive a second multi-billion euro bailout.

It's becoming clear however that bailouts and austerity are not enough. Growth and jobs are needed, Mr Van Rompuy told his Chinese hosts. But even they can't provide enough of those.

In a joint news conference with European Council President Herman Van Rompuy and European Commission President Jose Manuel Barroso, Mr Wen said China was willing to "increase its involvement" in attempts to stabilise the eurozone.

"China is firm in supporting the EU side in dealing with the debt problems. We match our words with our actions," he said.

"We are willing to conduct close communication and co-operation with the EU side."

He reiterated that China supported the EU and hoped the bloc would continue to "send clear, strong and positive messages" about stability.

But he offered no specific investment.

A press statement released after the talks listed 31 points of agreement covering a range of issues from cyber security to urban development.

But the statement made no mention of the eurozone crisis.

The BBC's Damian Grammaticas in Beijing says China has made similar promises to increase involvement in the past, but has been reluctant to follow through.

Mr Van Rompuy told reporters that he welcomed Mr Wen's comments.

Graphic

"It is up to China to make its own decision in order to contribute to the stability of the eurozone," he said.

"We agreed that we will co-operate with each other in these matters."

But analysts say it appears the EU delegation failed to get the solid commitment they wanted from China.

Mr Wen and other Chinese officials at the International Monetary Fund (IMF) warned last week that a recession in Europe could halve China's growth rates.

EU officials had hoped that such reports would encourage China to be more forthcoming.

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