 Spain's Minister of Industry, Trade and Tourism Miguel Sebastian Gascon (L) shakes hands with Chinese Executive-Vice Premier Li Keqiang prior to a meeting with Spanish and Chinese delegation of employers on Jan. 5, 2011, in Madrid. AFP photo |
Chinese Vice Premier Li Keqiang said his country will buy more of Spain's government debt on a three-day visit to Madrid, delivering a vote of confidence in the battered eurozone country.
The visit came as Spain battled market concerns that it may have need an Irish or Greek-style international rescue because of a debt refinancing crunch this year.
"We believe Spain, with its government and people working together, will surely overcome current economic and fiscal difficulties," Li reportedly told Spanish Finance Minister Elena Salgado after his arrival Tuesday.
Li, who is tipped to be China's next premier, is embarking on a European tour that will also include Britain and Germany, at a point when markets fear further debt crises in Portugal and Spain.
He was to hold talks Wednesday with Prime Minister Jose Luis Rodriguez Zapatero.
China's role in stabilizing the crisis could be significant, in part because it is the world's largest holder of foreign reserves with $2.648 trillion.
Bond holdings intact
China was a long-term and responsible player in the Spanish government bonds market and had not reduced its holdings, Li was quoted as saying by the Xinhua news agency.
China had even increased its buying activities amid European debt concerns, he said.
"We will buy more depending on market conditions," the agency quoted him as saying.
Spain's central and regional governments and its banks need to raise about 290 billion euros in 2011, including rolling over existing debt, opening the risk of "funding stress," Moody's warned last month.
Any bailout for Spain would be far bigger than anything seen to date in Europe - its economy is twice that of Greece, Ireland and Portugal combined.
Spain’s public debt rose to 57.7 percent of gross domestic product at the end of September from 53.2 percent at the end of 2009.
The Socialist government has slashed spending and promised to lower the public deficit from 11.1 percent of output in 2009 to 9.3 percent in 2010, and 6 percent this year.
It has vowed further to reduce the deficit to below the 3-percent European Union limit by 2013. Spain's premier said Tuesday the country had beaten its deficit-cutting target for 2010 and would meet this year's goal too.
In her talks with Li, Spain's finance minister said Chinese investors played an important role in stabilizing financial markets and suggested the two countries join in developing markets in Latin America.
The visit came as Spain battled market concerns that it may have need an Irish or Greek-style international rescue because of a debt refinancing crunch this year.
"We believe Spain, with its government and people working together, will surely overcome current economic and fiscal difficulties," Li reportedly told Spanish Finance Minister Elena Salgado after his arrival Tuesday.
Li, who is tipped to be China's next premier, is embarking on a European tour that will also include Britain and Germany, at a point when markets fear further debt crises in Portugal and Spain.
He was to hold talks Wednesday with Prime Minister Jose Luis Rodriguez Zapatero.
China's role in stabilizing the crisis could be significant, in part because it is the world's largest holder of foreign reserves with $2.648 trillion.
Bond holdings intact
China was a long-term and responsible player in the Spanish government bonds market and had not reduced its holdings, Li was quoted as saying by the Xinhua news agency.
China had even increased its buying activities amid European debt concerns, he said.
"We will buy more depending on market conditions," the agency quoted him as saying.
Spain's central and regional governments and its banks need to raise about 290 billion euros in 2011, including rolling over existing debt, opening the risk of "funding stress," Moody's warned last month.
Any bailout for Spain would be far bigger than anything seen to date in Europe - its economy is twice that of Greece, Ireland and Portugal combined.
Spain’s public debt rose to 57.7 percent of gross domestic product at the end of September from 53.2 percent at the end of 2009.
The Socialist government has slashed spending and promised to lower the public deficit from 11.1 percent of output in 2009 to 9.3 percent in 2010, and 6 percent this year.
It has vowed further to reduce the deficit to below the 3-percent European Union limit by 2013. Spain's premier said Tuesday the country had beaten its deficit-cutting target for 2010 and would meet this year's goal too.
In her talks with Li, Spain's finance minister said Chinese investors played an important role in stabilizing financial markets and suggested the two countries join in developing markets in Latin America.
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