China's central bank on Wednesday pledged to increase its holdings of euro-denominated assets, bolstering Beijing's recent rhetorical support for Europe but stopping short of a specific investment plan.
People's Bank of China Gov. Zhou Xiaochuan told visiting European Union leaders in Beijing that the central bank has "full confidence in the euro's role and its prospects," and that it will increase the proportion of its foreign-exchange reserves that is invested in the euro.
A day earlier, Chinese Premier Wen Jiabao said China views Europe as a main destination for investment as it diversifies its foreign-exchange reserves.
Despite the pledges of support, Chinese officials have stopped short of offering specific proposals for investing in Europe or buying European assets.
"China will continue to invest in EU countries' government bonds" and be involved in resolving the euro-zone crisis, possibly via channels such as the International Monetary Fund, the European Financial Stability Facility and the European Stability Mechanism, Mr. Zhou said.
But Mr. Zhou hopes Europe can offer "more attractive investment products," he said without elaborating.
China has been a regular buyer of bonds issued by the EFSF and also the sovereign debt of various euro-zone nations, but the level of its investment remains unknown.
China holds European assets through various channels, Mr. Zhou said, including its foreign-exchange reserves and its sovereign wealth fund, China Investment Corp.
Speaking at the same event Wednesday, European Council President Herman Van Rompuy warned against underestimating the political will to preserve the euro zone. Europe's leaders are "determined to keep euro zone alive," he said.
Mr. Van Rompuy said Europe greatly appreciates China's response to the European debt crisis.
"We highly value China's confidence," he said, adding that expressions of support were the key outcome of the EU-China summit held in the Chinese capital on Tuesday.
Also at Wednesday's event, European Commission President Jose Manuel Barroso praised the trend of European integration, saying it is "inseparable" from the future of the euro.
Europe is moving toward a fiscal union, while the European Central Bank is ensuring that banks have liquidity, he said. At the same time, it is essential not to forget the importance of expanding the economy and creating jobs, he added.
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