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POLITICAL ECONOMY
China says EU debt crisis 'important' to Beijing
by Staff Writers
Beijing (AFP) June 17, 2011

China said Friday the ability of eurozone countries to overcome their debt problems was "extremely important" to Beijing, while calling on EU nations to offer more work permits to Chinese investors.

The comments from senior Chinese officials came ahead of a trip next week to Europe by Chinese Premier Wen Jiabao and as the eurozone debt crisis has returned to the spotlight, with Greece on the edge of defaulting on its loans.

"The capacity of certain European nations to overcome their difficulties and come out of the crisis is extremely important for us," Vice Foreign Minister Fu Ying said ahead of Wen's June 24-28 trip to Hungary, Britain and Germany.

Fu, who was speaking at a briefing about Wen's European tour, said Beijing had supported European countries by "increasing its eurobond holdings" and by "promoting economic and commercial cooperation".

China has repeatedly expressed its confidence in the eurozone economies, and has invested an increasing portion of its world-leading foreign exchange reserves in euro-denominated assets.

Since December, China has pledged to buy government bonds from struggling Spain, Greece and Portugal.

Greece has warned it will be unable to pay next month's bills without a 12-billion-euro ($17 billion) loan instalment from the European Union and International Monetary Fund, part of a broader 110-billion-euro bailout package agreed last year.

Fu said Chinese companies were enthusiastic about investing in Europe, but lamented that "certain European politicians are prone to politically interpret the economic activities of Chinese companies in Europe".

"Chinese investment is no different than that of other nations," she said.

A senior commerce ministry official highlighted the fact that Chinese investors were having difficulty obtaining visas and work permits from European countries.

"Currently one of the main problems for our companies that want to invest in Europe are the visas and work permits," Wang Zhiming, the ministry's vice director of European affairs, told reporters.

Such problems are an "obstacle" to trade and tend to dissuade Chinese companies from investing in Europe, Wang said.

"China has constantly raised this issue with European authorities" but "unfortunately up until now, this has not been fundamentally resolved," he said.

"This is the most serious and most glaring problem that Chinese companies raise with us."




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Property prices continue to rise in China
Beijing (AFP) June 18, 2011 - The price of new apartments rose in May in 67 out of 70 Chinese cities tracked in a monthly survey, the National Bureau of Statistics said Saturday, as the government battles to rein in inflation.

The cost of new builds climbed by more than 5.0 percent in 33 of the cities, compared to 37 to April, the figures showed.

Soaring property prices are a major concern for many Chinese, with apartments in the centre of large cities beyond the reach of most budgets.

The real estate sector is one of the pillars of the economy and land sales to developers are an important source of revenue for municipalities.

Beijing has called on cities to build more social housing but local governments fear a loss of income if they sell land at low prices.

In its struggle to dampen inflation, the Chinese central bank Tuesday said it would raise the reserve requirement for the sixth time this year, effectively limiting the amount of money banks can lend.

In May, even before the latest increase which takes effect Monday, the volume of new loans had fallen sharply compared to April.

The consumer price index rose to 5.5 percent last month, its highest level since July 2008.

Further monetary tightening is expected in coming weeks as the authorities, anxious about inflation's potential to spark social unrest, try to stem a flood of credit in the economy.





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Carstens makes IMF case in China
Beijing (AFP) June 16, 2011
Mexico's candidate to lead the IMF was set to make a lightning visit to China on Thursday to try to win Beijing's support in what he himself has called an "uphill battle" to defeat Christine Lagarde. Agustin Carstens, the governor of Mexico's central bank, was due in Beijing for meetings with his Chinese counterpart Zhou Xiaochuan and Finance Minister Xie Xuren, before holding a press confer ... read more


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