Chinese clout seen in Brazil, Greece, Spain meetings - The Best from Greece

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Posted on: 13/Apr/2011

 A parade of foreign leaders are in China this week to attend a summit of BRICS countries -- Brazil, Russia, India, China and South Africa -- and the Boao business forum on the southern Chinese island of Hainan.

Even before those get underway, a series of important bilateral meetings were set for Tuesday with Brazilian President Dilma Rousseff, Spanish Prime Minister Jose Luis Rodriguez Zapatero and Greek Investment Minister Harris Pamboukis all in Beijing.

The visits revealed the divergent paths of nations in the wake of the global financial crisis and China's surge to prominence as a partner and a competitor.

Brazil has been a major beneficiary of China's voracious appetite for commodities, but its manufacturers have grown alarmed at a wave of Chinese imports.

That will likely be on Rousseff's mind when she pushes Beijing to buy more value-added goods from Brazil instead of just soaking up its commodities, whilst gently broaching the subject of an undervalued yuan.

In a deal that looked to be aimed at countering some of those worries among Brazilian manufacturers, Chinese airlines placed orders for 35 jets from Brazilian aircraft maker Embraer SA on Tuesday.

On the other side of the ledger are countries like Spain and Greece, beset by a mountain of debt, who have turned to China as a potential buyer of government bonds.

Those hopes were underscored by Greek Investment Minister Pamboukis in an interview with China's 21st Century Business Herald newspaper, published on Tuesday.

"(China's) purchase of Greek bonds will help our economy overcome the crisis and regain the confidence of the international market," he said, according to a Chinese-language transcript. "It will also help the stability of the eurozone. A stable eurozone will also help the stability of the Chinese economy."

He said Greece would open its transport, tourism, telecommunications and banking sectors to Chinese investors.

But China is no reluctant white knight. With an estimated one quarter of its $2.85 trillion in foreign exchange reserves invested in the euro, China is loath to see the eurozone and its currency fail.

As such, China has repeatedly pledged its support and confidence in Europe's ability to pull through the crisis, going so far as to say it had already bought Greek and Spanish debt and would buy more if need be.

Beijing has never disclosed its holdings or planned purchases.

In October, Premier Wen Jiabao said China had already bought Greek bonds and was preparing to buy more when Athens restarted fundraising.

Media reports in Spain and Portugal that said China was prepared to buy between 4-6 billion euros of debt from each of the European countries were never confirmed by Beijing.


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