MercoPress. South Atlantic News Agency

China has neither the ability or the intention to ‘buy Europe’ says Wen Jibao

Premier Wen Jiabao, Beijing willing to help but via the IMF

China's Premier Wen Jiabao said on Friday the Asian giant had neither the ability nor the intention to “buy Europe”, amid concerns over growing Chinese investment in debt-stricken Euro zone economies.

China is “willing to cooperate with Europe to fight the current crisis. Some people say this means China wants to buy Europe”, Wen told a German-China business forum in the southern city of Guangzhou.

“This is a concern and doesn't fit reality. China doesn't have this intention and doesn't have this ability.”

German Chancellor Angela Merkel, in China for a three-day visit to boost her host's confidence in Europe, also attended the forum along with executives from the energy, chemicals, engineering, banking and electronics sectors.

There are growing concerns in Europe that a recent wave of investment by Chinese companies and government-backed funds will give Beijing too much influence over struggling European economies.

In the latest deal, China State Grid has agreed to pay 508.2 million dollars for a 25% stake in the national electricity grid of debt-stricken Portugal, Treasury Secretary Maria Albuquerque said earlier this week.

European leaders have called on China, which has the world's largest foreign exchange reserves, to invest in a bailout fund to rescue debt-stricken countries.

China has so far made no firm commitment to provide financial assistance, although Wen said it was considering getting more involved in bailout funds through the International Monetary Fund.

Analysts say bargain-hunting is behind the recent acquisitions by Chinese companies seeking to expand overseas. The country's sovereign wealth fund has also sought to diversify away from US bonds.

At the forum Wen also touched on the politically sensitive topic of rare earths, 17 elements crucial in the manufacturing of many high-tech products, amid accusations China unfairly restricts exports of the valuable minerals.

China, the world's largest producer of rare earths, “has no discrimination when it comes to foreign companies”, Wen told the forum.

State media said this week Beijing was bracing for renewed calls to ease its rare earths controls after the World Trade Organisation ruled the country's limits on key raw material exports broke trade rules.