China says willing to help eurozone recover

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 exchange investments, following reports that Beijing could step in to shore up European finances.

The euro steadied against the dollar and the Swiss franc, and analysts said the outlook for the single currency was shaky, with fresh losses expected into 2011.

The Financial Times reported yesterday that China had offered to take more "concerted action" to support European financial stabilisation. It quoted 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.

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, after it 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.