Italy seeks Chinese investment aid

Italy wants China to buy its government bonds or invest in its companies in an attempt to aid its economy.

Italy wants China to buy its government bonds or invest in its companies in an attempt to aid its economy.

The chairman of China Investment Corporation met Italy’s finance minister last week in Rome, according to The Wall Street Journal and the Financial Times.

They gave no indication the two sides reached any agreements.

A Chinese foreign ministry spokeswoman said that in principle, Beijing will cooperate with European countries to help address the continent’s financial crisis.

“Europe will continue to be one of China’s main investment markets. We will also expand financial and economic cooperation and investment cooperation with European countries to jointly address the financial crisis,” she said.

Beijing hopes eurozone countries will “take effective measures to ensure the safety of China’s investments,” Jiang said.

Italian MPs are considering a plan to slash spending in an effort to stabilise government debt equal to nearly 120% of the country’s annual economic output.

CIC was created in 2007 to invest a portion of Beijing’s trillions in foreign reserves, the bulk of which are held in safe but low-earning assets such as US Treasury debt.

CIC says it makes investments based on commercial principles. It usually buys small minority stakes in foreign companies to avoid stirring political tensions.

The fund’s annual report in June said it is essentially fully invested, with only 4 % of its assets in cash.

The talks in Rome were attended by Italian Finance Minister Giulio Tremonti, CIC chairman Lou Jiwei and officials of China’s foreign currency regulator and the Cassa Depositi e Prestiti, an Italian government investment vehicle.

Italy’s financial crunch has prompted Rome to consider selling stakes in major state-owned companies such as power utility Enel or oil and gas supplier Eni.

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