Chinese, Ger­mans aim for 200 bln eu­ros in trade

Kathimerini English - - Business -

BER­LIN (Reuters) – Chinese Premier Wen Ji­abao and Ger­many’s Chan­cel­lor An­gela Merkel aim to boost trade be­tween the world’s two big­gest ex­port na­tions to at least 200 bil­lion eu­ros ($283.8 bil­lion) in the next five years, they said at a meet­ing in Ber­lin yes­ter­day. Wen also took the op­por­tu­nity to ex­press his con­fi­dence in the eu­ro­zone, say­ing the debt cri­sis of some mem­ber coun­tries such as Greece was only of a “tem­po­rary na­ture.” About a quar­ter of China’s record for­eign cur­rency re­serves of more than $3 tril­lion are es­ti­mated to be held in eu­ros and China has re­it­er­ated its con­fi­dence in the euro since the debt cri­sis be­gan, as well as pledg­ing to buy eu­ro­zone debt. Ger­man of­fi­cials ex­pected Wen and Merkel to talk about the euro and the G8 agenda for global cur­rency re­forms, which is seen as a path to­ward boost­ing the Chinese yuan’s pro­file on for­eign ex­change mar­kets. China’s in­ten­tions for its euro hold­ings and in­vest­ments in the sov­er­eign debt of eu­ro­zone coun­tries has been the sub­ject of much spec­u­la­tion in Wen’s visit to Europe. “It’s true that right now some Euro­pean Union coun­tries are en­coun­ter­ing eco­nomic prob­lems. These are, how­ever, of a tem­po­rary na­ture,” Wen told the first ever full min­is­te­rial con­sul­ta­tions be­tween China and Ger­many. The Chinese premier said the EU was “fully in a po­si­tion to over­come the present chal­lenges.” Euro­pean Cen­tral Bank pol­i­cy­maker Juer­gen Stark cau­tioned on Mon­day that he did not see China as a “res­cuer” of the euro, nor did he be­lieve the cur­rency needed to be res­cued. deficits have be­come a source of worry as the coun­try tries to get its pub­lic fi­nances in or­der. Za­p­a­tero also an­nounced new mea­sures to help Spa­niards strug­gling to make mort­gage pay­ments in an econ­omy with a eu­ro­zone-high un­em­ploy­ment rate of 21.3 per­cent. He gave no de­tails but said these would not hurt banks hold­ing the mort­gages. Za­p­a­tero made no men­tion of call­ing early elec­tions as the op­po­si­tion is push­ing him to. His term ends in March 2012. Mervyn King told the House of Com­mons Trea­sury Com­mit­tee that sim­ply in­ject­ing cash into economies to buy time would be in­suf­fi­cient if gov­ern­ments failed to use that time to make the nec­es­sary re­forms. “Buy­ing time is not suf­fi­cient. That time has to be used,” King said. His com­ments came a day be­fore the Greek Par­lia­ment be­gins vot­ing on aus­ter­ity mea­sures that have to be passed be­fore the Euro­pean Union and the In­ter­na­tional Mon­e­tary Fund will re­lease the next in­stall­ment of Greece’s 110 bil­lion ($156 bil­lion) bailout loan. With­out the 12-bil­lion-euro in­stall­ment, Greece faces the prospect next month of be­com­ing the first eu­ro­zone coun­try to de­fault on its debts, which could drag down Euro- pean banks and af­fect other fi­nan­cially trou­bled Euro­pean coun­tries. King said that, in the end, coun­tries will have to run trade sur­pluses to pay off their mas­sive debts.

(AP)

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