Officials vow to keep using IMF to help Europe

Updated: 2012-02-28 08:08

By Chen Jia (China Daily)

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Officials vow to keep using IMF to help Europe

Time's best for Chinese companies to increase investment in eurozone

BEIJING - Top Chinese officials have pledged the nation's continued support for Europe by investing in its bailout fund, on the premise that indebted countries first take efficient steps to resolve their problems.

It is advisable for the country to boost resources for the International Monetary Fund now, but a comprehensive and in-depth evaluation of every indebted country should come first, Wei Jianguo, secretary-general of the China Center for International Economic Exchanges and the former vice-minister of commerce, said on Monday.

The nation's financial leaders - Vice-Minister of Finance Zhu Guangyao and People's Bank of China Governor Zhou Xiaochuan - made similar comments at the G20 meeting in Mexico City over the weekend.

"There are discussions on whether IMF needs more resources now, and all leaders from European countries welcome China's ... constructive contribution to that," Annika Melander, the first counselor and head of the Economic and Financial Affairs Section with the Delegation of the European Union in China, said on Monday in Beijing.

But how and when further investments will be made in the bailout fund depend on China alone, she said.

The world's second-largest economy, which is also the eurozone's biggest trade partner, is considering effective ways to fund the European Financial Stability Facility and European Stability Mechanism under the framework of the IMF.

A statement posted on the central bank's website on Monday said that the G20 should make efforts to tackle the European debt crisis, rising oil prices and disorderly capital flows.

"We are going to discuss in just a couple of days among the EU heads and the US government whether we should allow the temporary rescue mechanism to run in tandem with permanent ones," said Melander.

As a member of the G20, China can play a significant role in stabilizing the international financial system and supporting the global economic recovery, according to Dirk Moens, the secretary-general of the European Union Chamber of Commerce in China.

According to the Ministry of Commerce, China's direct investment in the eurozone countries was $4.27 billion in 2011, increasing 94 percent from a year earlier, the fastest growth among all their trade partners.

"I am not optimistic about investment in European countries this year, because of their gloomy economic outlook," said Wei. "But I do think it is the best time for Chinese companies to increase their businesses in the eurozone."

The Chinese government is pushing companies in different industries, including the green technology and service sectors, to invest in the EU through joint ventures as well as mergers and acquisitions, Wei said.