China won’t use foreign exchange reserves to rescue Europe

PanARMENIAN.Net -

Europe cannot expectChinato use a big portion of its $3.2 trillionforeign exchange reservesto rescue indebted nations, a top Chinese foreign ministry official said on Friday, December 2, Beijing's strongest rebuttal yet to suggestions it should bail out the euro zone.

According to Reuters, Vice Foreign Minister Fu Yingsaid at a forum that the argument that China should rescueEurope does not stand and that Europeans may have misunderstood how China manages its reserves.

She did not explicitly rule out using part of China's reserves for more targeted measures, but implied China was not going to ride in with a big chunk of its "savings" and bail out crisis-stricken Europe.

"We cannot use this money domestically to alleviate poverty," Fu said. "We also can't take this money abroad for development support."

Economists estimate that Beijing has already invested a fifth of its reserves in euro assets.

While the size of China's reserves is the largest in the world, analysts say two-thirds of that is locked up in dollar assets that cannot be sold, giving Beijing a more modest portion of about $470 billion to invest each year.