UPDATE 1-China says willing to help eurozone return to health

(Adds market reaction, background)

BEIJING, Dec 23 (BestGrowthStock) – China is willing to help
countries in the euro zone return to economic health and will
support the International Monetary Fund element of a bailout
package for the bloc, a Chinese Foreign Ministry spokeswoman
said on Thursday.

Foreign Ministry spokeswoman Jiang Yu also told a regular
news conference in Beijing that the euro zone was one of the
most important areas for China’s foreign (Read more about foreign investment into China) exchange investments,
following reports that Beijing could step in to shore up
European finances.

The euro steadied against the dollar and the Swiss franc,
helped by the comments, although analysts said the outlook for
the single currency was shaky, with fresh losses expected into
2011. [FRX/]

The Financial Times reported on Wednesday that China had
offered to take more “concerted action” to support European
financial stabilisation. It cited unnamed senior European
officials after talks with Chinese Vice Premier Wang Qishan.

Separately, a Portuguese newspaper reported that China was
ready to buy 4-5 billion euros of Portuguese sovereign debt to
help the country ward off market pressure which has intensified
as investors grew concerned it would be next in line to seek a
bailout after Ireland and Greece. [ID:nLDE6BL0TY]

Portuguese officials have said the government is trying to
diversify its debt investor base, with China as a priority.

Finance Minister Fernando Teixeira dos Santos met Chinese
Finance Minister Xie Xuren and the head of the People’s Bank of
China during a visit to the country last week.

But it is unclear whether Beijing would be prepared to take
on so much fresh exposure to Portugal, given that Beijing has
faced domestic political pressure to invest the country’s
foreign reserves more carefully.

Chinese investment funds suffered some large, high-profile
losses during the global financial crisis.

In October, during a visit to Greece, Chinese Premier Wen
Jiabao offered to buy Greek bonds when Athens resumed issuing.

A month later, President Hu Jintao visited Portugal and
offered “concrete measures” to help the weak economy but stopped
short of promising to buy Portuguese bonds.
(Reporting by Chris Buckley, Writing by Sui-Lee Wee, editing by
Mike Peacock)

UPDATE 1-China says willing to help eurozone return to health