BEIJING (Reuters) - Europe should not expect China to ride to the rescue as its “savior” from the debt crisis, though Beijing will do what it can to help a friend in need, state-run news agency Xinhua said in a commentary on Sunday.
The head of Europe’s rescue fund sought to entice China on Saturday to invest in the facility by saying investors may be protected against a fifth of initial losses and that bonds could eventually be sold in yuan if Beijing desires.
Though China has expressed confidence that Europe can survive its crisis, it has made no public offer to buy more European government debt.
Xinhua, in an English-language commentary, said China could not stand by while its largest trading partner foundered.
“Beijing’s good-will gesture is a good response to those who see China as a threatening rival to Europe. Despite differences in politics, economy and culture, China and the EU are still good friends and partners,” it wrote.
“However, amid such an unprecedented crisis in Europe, China can neither take up the role as a savior to the Europeans, nor provide a ‘cure’ for the European malaise,” Xinhua added.
“Obviously, it is up to the European countries themselves to tackle their financial problems. But China can do within its capacity to help as a friend.”
Such commentaries offer an insight into government thinking, even if they do not reflect official policy.
China’s pile of $3.2 trillion in foreign exchange reserves, the biggest in the world, keeps growing thanks to trade surpluses and capital inflows.
Analysts estimate that China holds about a quarter of its foreign exchange in euro assets and there are few other places for it to park investments of such a scale.
The government has said it has confidence in the euro and in the European Union’s efforts to tackle the crisis. But comments from Chinese economists and in state media have also revealed anxieties about the security of euro assets.
Expanding the European Financial Stability Facility (EFSF) to 1 trillion euros is key to the euro zone’s latest anti-crisis plan, put together at a Eurozone summit last week.
Details on how this would be done have yet to be finalized and European leaders are under pressure to show the plan will work.
Xinhua said Europe needed to make “more concerted efforts”.
The G20 summit in Cannes next month should accord China the respect it deserves, the commentary added.
“It is advisable that at the summit European leaders take heed of the voices of emerging economies, whose remarkable contribution to world economic recovery and growth deserves better understanding and reciprocal treatment.”
Reporting by Ben Blanchard; Editing by Ron Popeski