Reuters Update: Italy asks China to buy its bonds

September 13, 2011, 12.01 pm (Singapore time)

Update: Italy asks China to buy its bonds NEW YORK/BEIJING - Italy has asked China to make 'significant' purchases of Italian debt, the Financial Times reported on its website on Monday. Italian officials told the FT that Lou Jiwei, chairman of China Investment Corp (CIC), headed up a delegation to Rome last week to meet with Giulio Tremonti, finance minister, and Italy's Cassa Depositi e Prestiti. Two weeks ago, Italian officials were in Beijing to meet CIC and China's State Administration of Foreign Exchange (SAFE), which manages the bulk of China's foreign exchange reserves, the FT said. CIC is the country's US$300 billion sovereign wealth fund. China signalled in April that it could buy more debt from the eurozone's weaker states. There are no precise figures, but China has said it has bought billions of euros of debt. Wu Xiaoling, a former deputy governor of the People's Bank of China, told Reuters on Tuesday, that investor 'panic' about Europe's debt crisis is unnecessary, and China is ready to work with others to boost market confidence. 'We will continue to support Europe's measures in maintaining a stable euro,' said Ms Wu, who is now with the National People's Congress Standing Committee, the law-making body. With about a quarter of China's record foreign currency reserves of US$3.2 trillion estimated to be held in euro assets, Chinese leaders have repeatedly voiced support for the debt-mired single currency area. Premier Wen Jiabao said earlier this month that China retains confidence in the euro and Europe's economy but the region's governments need to ensure the security of Chinese investments there. -- REUTERS Bill E's take : despite market talk , i think China is not really interested in buying toxic PIIGS bonds which she  knows are dead on arrival , china is hoping to exploit the euro crisis to buy prized assets in europe  on the cheap for her strategic use either military or commercial  - eg technology, resources companies , ports , real estate in strategic locations etc. and use the opportunity to open up eurozone markets and internationalize the RMB. so this bit of "news" could be wishful thinking or political gamesmanship on the part of  the italians , and is unlikely to move markets for long ..