China urges EU to reach debt plan without delay

China urged the European Union Monday to reach a plan to deal with its debt problem as soon as possible and prevent the crisis from spreading, as the country's number four-ranked leader arrived for a visit of the continent, including Greece.

"We hope that the EU countries concerned will reach a comprehensive settlement plan as soon as possible and adopt effective measures to ease the euro debt crisis and prevent the crisis from spreading further," Foreign Ministry spokeswoman Jiang Yu told a regular news briefing.

"China is confident that the EU has the ability and wisdom to overcome these straits. We have always provided what help we can to the countries concerned via bilateral and multilateral channels," she added.

At a summit Sunday, European Union leaders neared agreement on bank recapitalization and on how to use the European Financial Stability Facility to stave off bond market contagion.

Sharp differences remain, however, over the size of losses private holders of Greek government bonds will have to accept. Final decisions were deferred until a second summit on Wednesday.

The mostly likely method for leveraging the euro zone's bailout fund involves using it to provide bond insurance while combining its firepower with a special purpose vehicle drawing in funds from China or Brazil, EU officials said.

Jiang declined to comment on that idea, saying her ministry was not the appropriate agency to answer such a question.
"In principle, we support the efforts of the EU countries concerned in addressing this crisis," she said.

Chinese Premier Wen Jiabao urged Europe Friday to stop its debt crisis from spreading across the bloc, warning that fundamental reforms were needed to staunch the euro zone's troubles, in comments made after the two sides postponed an annual summit.

Jia Qinglin, who heads a largely ceremonial advisory body to China's parliament and is the Communist Party's fourth-ranked leader, will repeat offers of support for and confidence in Europe during a visit this week that also includes heavily indebted Greece, state news agency Xinhua said.

Jia will "reiterate China's confidence in Europe's ability to cure the current financial malaise as well as Beijing's willingness to assist the debt-ridden continent in grappling with the challenge," Xinhua said in a commentary.

Jia will also go to the Netherlands and Germany.

China holds an estimated quarter of its $3.2 trillion of foreign exchange reserves in euro assets. It has few options on where to put that wealth, giving it strong reasons to press Europe to surmount divisions, contain the debt crisis and protect Beijing's stake in its biggest trade partner.

The euro bloc's crisis has already taken a toll on Chinese exports, which grew at their slowest pace in seven months in September.


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