Chinese investors showed a willingness Wednesday to invest billions of euros in Spain, with the China Investment Corporation - c - saying it may inject up to 9.3 billion euros ($13.4 billion) into the Spanish financial system.
The potential investments were discussed at a meeting in Beijing of Spanish Prime Minister Jose Luis Rodriguez Zapatero with China's largest financial institutions, sources in Spain's government said.
A day after Chinese Premier Wen Jiabao pledged to continue buying Spanish government bonds and investing in the restructuring of Spain's ailing savings banks, or cajas, Zapatero met with representatives of the CIC, the Chinese central bank and the Bank of China, among other institutions.
The investment capacity of those institutions exceeds $3.5 trillion, or more than three times Spain's gross domestic product, according to Spanish government officials.
Zapatero, who is on an Asian tour to China and Singapore, presented the banking executives his government's financial reform plan and told them there is no longer a risk that the eurozone's sovereign debt crisis will spread to Spain.
The vice president of the China Banking Regulatory Commission, Zhou Mubing, said China has a close eye on the evolution of Spain's financial sector, noting that Santander - Spain's No. 1 bank - and the China Construction Bank formed a joint venture Tuesday that has approval to open 200 branches in rural areas of the Asian nation.
The CIC, meanwhile, has already conducted a review of the Spanish financial sector and spoken with two large banks, according to the wealth fund's vice president, Xie Ping, who said that entity is currently studying potential investments to bolster the cajas.
Chinese central bank official Jin Qi, meanwhile, noted that the Asian giant has backed Spain's economy by purchasing its government bonds and said that support will continue.
For his part, the president of the Bank of China, Xiao Gang, stressed his organization's interest in entering the Spanish retail banking market, noting that it already has branches in 10 European countries.
Zapatero once again thanked China for the confidence it has shown in Spain throughout the global crisis, which was exacerbated in the Iberian nation by the end of a decade-long property boom.
That support "has been an important factor for the markets, (helping to) generate stability," he said.
China's pledge to continue buying Spanish bonds and invest in the cajas are "two valuable commitments that will help contribute to confidence, stability, reforms and the recovery of our economy," Zapatero told a press conference.
The Spanish government is determined to reduce budget deficits in the short term and position public spending at sustainable levels, and its austerity measures and overhaul of pensions have received a positive reaction from financial markets.
However, it must balance the deficit-cutting measures with initatives to spur growth in a country wracked by high joblessness.
More than 4.3 million residents of Spain are unemployed, according to official figures released last week, the highest total in 15 years.
That translates into a jobless rate above 20 percent, the worst among the 34 mainly rich nations in the Organization for Economic Cooperation and Development.
Zapatero, meanwhile, also encouraged Chinese investors to participate in the partial privatization Spain's airports and in an infrastructure plan being carried out as a public-private collaboration.
It is paradoxical that Spanish companies have invested more in China than the Asian giant has in Spain, the prime minister said, adding that the goal is to reverse that trend.
Zapatero said Spanish companies have invested in China to secure a privileged position in a country that has registered average annual growth of 10 percent over the past three decades, an unprecedented economic rise.
"Spain is very well positioned in China and this gives a big boost to our companies and (also represents) great potential for the investment that we need," Zapatero said.
Source: http://latino.foxnews.com
The potential investments were discussed at a meeting in Beijing of Spanish Prime Minister Jose Luis Rodriguez Zapatero with China's largest financial institutions, sources in Spain's government said.
A day after Chinese Premier Wen Jiabao pledged to continue buying Spanish government bonds and investing in the restructuring of Spain's ailing savings banks, or cajas, Zapatero met with representatives of the CIC, the Chinese central bank and the Bank of China, among other institutions.
The investment capacity of those institutions exceeds $3.5 trillion, or more than three times Spain's gross domestic product, according to Spanish government officials.
Zapatero, who is on an Asian tour to China and Singapore, presented the banking executives his government's financial reform plan and told them there is no longer a risk that the eurozone's sovereign debt crisis will spread to Spain.
The vice president of the China Banking Regulatory Commission, Zhou Mubing, said China has a close eye on the evolution of Spain's financial sector, noting that Santander - Spain's No. 1 bank - and the China Construction Bank formed a joint venture Tuesday that has approval to open 200 branches in rural areas of the Asian nation.
The CIC, meanwhile, has already conducted a review of the Spanish financial sector and spoken with two large banks, according to the wealth fund's vice president, Xie Ping, who said that entity is currently studying potential investments to bolster the cajas.
Chinese central bank official Jin Qi, meanwhile, noted that the Asian giant has backed Spain's economy by purchasing its government bonds and said that support will continue.
For his part, the president of the Bank of China, Xiao Gang, stressed his organization's interest in entering the Spanish retail banking market, noting that it already has branches in 10 European countries.
Zapatero once again thanked China for the confidence it has shown in Spain throughout the global crisis, which was exacerbated in the Iberian nation by the end of a decade-long property boom.
That support "has been an important factor for the markets, (helping to) generate stability," he said.
China's pledge to continue buying Spanish bonds and invest in the cajas are "two valuable commitments that will help contribute to confidence, stability, reforms and the recovery of our economy," Zapatero told a press conference.
The Spanish government is determined to reduce budget deficits in the short term and position public spending at sustainable levels, and its austerity measures and overhaul of pensions have received a positive reaction from financial markets.
However, it must balance the deficit-cutting measures with initatives to spur growth in a country wracked by high joblessness.
More than 4.3 million residents of Spain are unemployed, according to official figures released last week, the highest total in 15 years.
That translates into a jobless rate above 20 percent, the worst among the 34 mainly rich nations in the Organization for Economic Cooperation and Development.
Zapatero, meanwhile, also encouraged Chinese investors to participate in the partial privatization Spain's airports and in an infrastructure plan being carried out as a public-private collaboration.
It is paradoxical that Spanish companies have invested more in China than the Asian giant has in Spain, the prime minister said, adding that the goal is to reverse that trend.
Zapatero said Spanish companies have invested in China to secure a privileged position in a country that has registered average annual growth of 10 percent over the past three decades, an unprecedented economic rise.
"Spain is very well positioned in China and this gives a big boost to our companies and (also represents) great potential for the investment that we need," Zapatero said.
Source: http://latino.foxnews.com
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