* Grilli likely to meet with China Investment Corporation
* Visit comes after fresh euro zone concerns
* Italian bond yields have risen to over 5.6 percent
By Giuseppe Fonte
ROME, April 25 Italy's Deputy Economy Minister
Vittorio Grilli will visit Beijing on Thursday, seeking to
persuade Chinese investors to buy Italian sovereign bonds which
have come under pressure amid turmoil on euro zone debt markets,
sources said on Wednesday.
The visit by one of Italy's most senior finance officials is
likely to include talks with representatives from the powerful
China Investment Corporation and follows a fresh outbreak of
concerns about Italian government bond yields, which have
climbed sharply in recent weeks amid concerns about the
robustness of weaker euro zone member states.
"Grilli will meet representatives of China's financial
community tomorrow to seek investments in Italy, including
government bonds," a person with direct knowledge of the visit
Italian officials have visited Asian capitals including
Beijing a number of times since the outbreak of the eurozone
debt crisis and Prime Minister Mario Monti made a similar
appeal for investment during a visit only last month.
Monti, appointed to succeed the scandal-prone Silvio
Berlusconi last year as soaring borrowing costs threatened to
tip Italy into a Greek-style debt crisis, has presided over a
deterioration in the country's financial situation after a brief
honeymoon period at the start of the year.
As market confidence provided by the European Central Bank's
injection of cheap liquidity has faded and worries have grown
over the health of Spain and other southern economies, Italy has
been drawn back into stormy waters.
Public discontent at austerity measures that have put up
taxes while squeezing wages and pensions has hit Monti's
approval ratings as he tries to retain the faith of investors
and pass reforms to lift the chronically stagnant economy.
Ten year Italian bond yields have risen to more than 5.6
percent, while the risk premium demanded to hold Italian bonds
rather than benchmark German Bunds has climbed back over 400
That is still some way off the peak spread levels of more
than 550 basis points reached in November last year, but enough
to raise alarm about the sustainability of Italy's
1.9-trillion-euro public debt pile.
The government last week cut its economic forecasts to
reflect a 1.2 percent contraction in gross domestic product this
year, worse than a previously forecast 0.4 percent contraction,
setting back prospects of a quick reduction in the debt burden.
It also delayed its main deficit target by one year, and now
expects to reach a balanced budget by 2014 instead of 2013 as
Italy's debt burden is expected to amount to 123.4 percent
of gross domestic product this year, second only to Greece in
the euro zone.