China offers to give help to Portugal

City A.M. Reporter
PRESIDENT Hu Jintao said yesterday China will back Portugal’s efforts to deal with fallout from the world financial crisis, but stopped short of promising to buy Portuguese bonds as the debt-ridden country had hoped.

“We are willing to take concrete measures to help Portugal cope with the global financial crisis,” he said after meeting Prime Minister Jose Socrates, without elaborating.

Last month, Premier Wen Jiabao promised to buy Greek government bonds when Athens returns to markets, in a show of support for the country whose debt burden pushed the Eurozone into crisis and required an international bailout.

Portugal, which unlike Greece still sells bonds on financial markets although at high cost, had hoped for a similar promise as it attempts to soothe investors about its high budget deficit and ballooning debt. Deputy Foreign Minister Fu Ying, who is part of the Chinese delegation visiting Europe, said that Beijing remained committed to investing in European bonds and was willing to lend Portugal a helping hand.

The Chinese government faces criticism at home over losses which state entities incurred during the global crisis. But using part of its huge foreign currency reserves to support troubled European countries would help to deflect international criticism of its trade policies.