China to keep investing in euro zone debt: People's Bank of China

BEIJING: China will continue to invest in euro zone government debt, the country's central bank governor said on Wednesday, while calling on Europeans to produce more attractive investment products for China.

Zhou Xiaochuan admitted that China and other emerging nations like Brazil, Russia or India were waiting for the right time to help the bloc, after a European Union state visit was once again met with encouraging words but no concrete public commitments on fresh funding from China.

But he also suggested Europe needed to work harder to entice Beijing to part with its capital.

"We also hope that the euro zone and EU can innovate their mechanisms to offer new products that are more helpful for Sino-Europe cooperation," he said.

The central bank governor reiterated previous comments from Premier Wen Jiabao that China was ready to play a bigger role in solving Europe's debt problems, noting China had not cut its reserves exposure to the euro zone.

"At the G20, our state leaders promised European leaders that, amid the global financial crisis and the Europe sovereign debt crisis, China will not cut the proportion of euro exposure" in its reserves, Zhou said in a speech at the University of International Business and Economics in Beijing.

Although Zhou's comments largely underlined China's established stance, the remarks helped push the euro to an intraday high of $1.3163. Traders said some investors were short of the currency, which had exaggerated the rise.

Any bigger role in solving the debt crisis would be via the International Monetary Fund and the European Financial Stability Fund, or EFSF, Zhou said, echoing Wen's comments.

"We strongly believe European countries can work together to handle the challenges. They are able to solve the sovereign debt crisis," Zhou said.

"The People's Bank of China has always maintained close cooperation and contacts with the European Central Bank, and we support each other in many policy aspects. The PBOC firmly supports the ECB's recent measures to address the difficulties."

Verbal reassurances from Zhou and senior Chinese leaders come as European Council President Herman Van Rompuy and European Commission President Jose Manuel Barroso are visiting Beijing for a China-EU summit.

Van Rompuy assured his Chinese hosts that they should not underestimate the strong political incentive to keep the euro zone intact.

The summit was delayed from late last year as European leaders struggled to deal with an escalating debt crisis.