China's sovereign wealth fund will be willing to invest in Europe once the continent presents a clear solution to its debt crisis, reforms its welfare system and invests money in itself, an official says.
With concerns about excessive debt threatening to bankrupt Italy and Spain and destabilising banks across the continent, European leaders have promised to offer proposals that will calm investors at their summit on Sunday.
Though there have been some suggestions that Europe needs money from wealthy emerging economies, like China, many have said Europe has enough money to solve its own problems - and needs to deploy it.
Jin Liqun, chairman of the board of supervisors of the China Investment Corporation, echoed those sentiments on Monday on the sidelines of a conference on sovereign wealth funds, saying the fund would take a "market approach" to investing in Europe. That indicates that, like other investors, it will wait to see leaders stabilise their debt crisis before jumping in.
"What you need to do, you do, and then I think we should come in," he said.
He cautioned against looking to the CIC to solve Europe's problems, noting that the fund's resources pale in comparison to the continent's. The CIC has about $US100 billion ($97.12 billion) at its disposal to spend abroad, he said.
"I hate to use the word, 'rescue,' 'salvage,"' he said. "Euro zone is one of the few political and economic establishments which are expecting charity from China and emerging markets. We respect you, please respect yourself."
Jin was unusually candid about what ails Europe and urged leaders to have the "guts" to make significant reforms - as Asian leaders did when faced with their crisis in the late 1990s.
"The root cause of the trouble is the overburdened welfare ... the sloth-inducing, indolence-inducing labor laws," he said. "People need to work harder. They need to work longer."
Many have argued that, during boom times, European governments funded their prosperity and generous welfare states with deficit spending, while not sufficiently investing in growth. As the global economy has slowed, European countries have struggled to repay those debts.
The crisis has come to a head in recent weeks, and now all eyes are on Sunday's summit in Brussels for a solution.
But German Finance Minister Wolfgang Schaeuble cautioned against expecting too much from the meeting. Leaders are expected to present a plan to reduce Greece's debts, make European banks keep more money on hand and find a way to use Europe's bailout fund to ensure the crisis doesn't creep into larger economies, like Italy and Spain.
Jin said the plan didn't need to be fully formed, but it needed to happen fast.
"Don't try to seek perfection to a fault," he advised European leaders. "Just do something, something which is really making a difference."
Source: www.smh.com.au
With concerns about excessive debt threatening to bankrupt Italy and Spain and destabilising banks across the continent, European leaders have promised to offer proposals that will calm investors at their summit on Sunday.
Though there have been some suggestions that Europe needs money from wealthy emerging economies, like China, many have said Europe has enough money to solve its own problems - and needs to deploy it.
Jin Liqun, chairman of the board of supervisors of the China Investment Corporation, echoed those sentiments on Monday on the sidelines of a conference on sovereign wealth funds, saying the fund would take a "market approach" to investing in Europe. That indicates that, like other investors, it will wait to see leaders stabilise their debt crisis before jumping in.
"What you need to do, you do, and then I think we should come in," he said.
He cautioned against looking to the CIC to solve Europe's problems, noting that the fund's resources pale in comparison to the continent's. The CIC has about $US100 billion ($97.12 billion) at its disposal to spend abroad, he said.
"I hate to use the word, 'rescue,' 'salvage,"' he said. "Euro zone is one of the few political and economic establishments which are expecting charity from China and emerging markets. We respect you, please respect yourself."
Jin was unusually candid about what ails Europe and urged leaders to have the "guts" to make significant reforms - as Asian leaders did when faced with their crisis in the late 1990s.
"The root cause of the trouble is the overburdened welfare ... the sloth-inducing, indolence-inducing labor laws," he said. "People need to work harder. They need to work longer."
Many have argued that, during boom times, European governments funded their prosperity and generous welfare states with deficit spending, while not sufficiently investing in growth. As the global economy has slowed, European countries have struggled to repay those debts.
The crisis has come to a head in recent weeks, and now all eyes are on Sunday's summit in Brussels for a solution.
But German Finance Minister Wolfgang Schaeuble cautioned against expecting too much from the meeting. Leaders are expected to present a plan to reduce Greece's debts, make European banks keep more money on hand and find a way to use Europe's bailout fund to ensure the crisis doesn't creep into larger economies, like Italy and Spain.
Jin said the plan didn't need to be fully formed, but it needed to happen fast.
"Don't try to seek perfection to a fault," he advised European leaders. "Just do something, something which is really making a difference."
Source: www.smh.com.au
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