China might be moving in to provide additional help in the eurozone, Chinese premier Wen Jiabao announced on Thursday. Although Wen did not make any explicit financial commitments, he did say that ?China is?considering increasing its participation in the solution of the European debt crisis.? If China did get involved, it would likely be through the European Financial Stability Facility (EFSF) or the European Stability Mechanism (ESM), funds that have been established for bailouts[1]. EFSF is a temporary fund and ESM is permanent and projected to become operational in July of this year. China has about a quarter of its foreign exchange reserves in euro assets.
Perhaps not entirely surprisingly, European shares rose immediately in the wake of these comments. However, since Wen made no promises and offered no specifics, values have ?bounced around? since the announcement[2]. Wen emphasized that in order for China to seriously consider becoming involved, European leaders would need a clear plan for recovery.
Do you think that China should be involved in European debt crisis relief?
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[1] http://www.cnbc.com/id/46233783
[2] http://www.reuters.com/article/2012/02/02/markets-global-idUSL5E8D15FE20120202
Category: Financial Markets
Source: http://investing.bryanellis.com/608/market-news-china-might-get-more-involved-in-eurozone-rescue/
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