"We are ready to support the eurozone countries to overcome the financial crisis and realise economic recovery," foreign ministry spokeswoman Jiang Yu told reporters at a regular briefing.

"In the future, the European Union will be one of the major markets for our forex investment."

China has emerged as a key player in the European debt crisis. Beijing has the world's largest foreign exchange reserves at 2.648 trillion dollars, a significant portion of which is invested in the euro.

At annual Sino-EU trade talks this week, Chinese Commerce Minister Chen Deming expressed concern about Europe's debt crisis and said Beijing was looking to EU policymakers for "real action" to keep the 27-nation bloc on course.

"We are very concerned about whether the European debt crisis can be controlled," Chen told reporters in Beijing on Tuesday.

"We want to see if the EU is able to control sovereign debt risks and whether consensus can be translated into real action to enable Europe to emerge from the financial crisis soon and in a good shape," he added.

In October, China pledged to back Greece, which nearly defaulted this year when investors snubbed its debt, by buying its bonds in future debt issues.

During a visit to Lisbon last month, Chinese President Hu Jintao pledged to help Portugal handle its fiscal crisis but Beijing has not yet made firm promises regarding the purchase of Portuguese government debt.

In Lisbon, the Portuguese newspaper Jornal de Negocios said Wednesday, without citing sources, that China was ready to buy up to five billion euros (6.5 billion dollars) in Portuguese sovereign bonds.

Portuguese Finance Minister Fernando Teixeira dos Santos travelled last week to China where he met senior Chinese officials to discuss his country's debt woes.

Also last week, EU leaders pledged to defend debt-plagued eurozone nations with a permanent bailout mechanism from mid-2013 -- the successor to a temporary, International Monetary Fund-backed trillion-dollar facility.

Greece and Ireland have both been bailed out by the EU and the IMF. Portugal, Spain, Belgium and even Italy are considered at risk by experts going into 2011.

On Tuesday, Chinese Vice-Premier Wang Qishan said Beijing supported measures taken by the EU and the IMF to ensure financial stability across the eurozone and hoped they would "achieve some results as soon as possible".

Those comments drove up the value of the euro, but that drive was tempered by a warning from Moody's over a possible ratings downgrade for Portugal.

Officials in Greece and Portugal told AFP they did not have firm numbers for Chinese holdings in their sovereign debt. Beijing currently holds more than 900 billion dollars in US debt.

On Thursday, Jiang refused to comment on specifics about how Beijing would invest in Europe, saying the foreign ministry was not the government body in charge of such matters.

earlier related report
China backs EU finance measures at start of trade talks
Beijing (AFP) Dec 21, 2010 - China backs measures taken by the European Union and International Monetary Fund to ensure financial stability, Chinese Vice Premier Wang Qishan said Tuesday at the start of Sino-EU trade talks.

Wang, speaking at the opening of the day-long high-level economic and trade dialogue, said Beijing would help some EU members combat the sovereign debt crisis, state media and Dow Jones Newswires reported.

"It is in the fundamental interests of China and the EU to further strengthen mutually beneficial economic cooperation," Xinhua news agency quoted Wang as saying.

Last week, EU leaders pledged to defend debt-plagued eurozone nations with a permanent bailout mechanism from mid-2013 -- the successor to a temporary, IMF-backed trillion-dollar facility.

Greece and Ireland have both been bailed out by the EU and the IMF. Portugal, Spain, Belgium and even Italy are considered at risk by experts going into 2011.

In October, China pledged to back Greece, which nearly defaulted this year when investors snubbed its debt, by buying its bonds in future debt issues.

During a visit to Lisbon last month, Chinese President Hu Jintao pledged to help Portugal shed its fiscal crisis but Beijing has not yet made firm promises regarding the purchase of Portuguese government debt.

Wang was co-chairing Tuesday's talks with European Commission Vice-President in charge of competition policy Joaquin Almunia, Trade Commissioner Karel De Gucht, and Commissioner for Economic and Monetary Affairs Olli Rehn.

Almunia said the 27-nation bloc wanted to see "equal openness" in both the China and EU markets, as well as open access for the EU to raw materials. He said protection of intellectual property rights would also be on the agenda.

EU-China trade has exploded in recent years, making the EU the top destination for Chinese exports while China is Europe's biggest trade partner after the United States.

But European officials have complained bitterly about what they say is the artificial undervaluation of the Chinese yuan, saying it gives Chinese exporters an unfair advantage.

European firms are also concerned over China's move to cut export quotas of rare earths -- elements that are key components in everything from iPods to cars. Last year, China produced 97 percent of world supply of the minerals.

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