Debt Crisis

China willing to buy Hungarian bonds

By Li Xiaokun and Fu Jing (China Daily)
Updated: 2011-06-26 07:42

Chinese Premier Wen Jiabao watches a folk dance performed by students at the Eotvos Lorand University in downtown Budapest on Friday. Wen is in Europe for a five-day visit to Hungary, Britain and Germany. [Photo/Xinhua]

BUDAPEST - Visiting Premier Wen Jiabao announced on Saturday that China will consider buying a "certain amount" of Hungarian bonds, signaling that his country is still determined to help European countries work out the debt crisis.

Speaking at a press conference with Hungarian Prime Minister Viktor Orban, Wen also pledged to double the bilateral trade volume to about $20 billion by 2015, partly by boosting China's imports.

He also said China's national development bank would provide 1 billion euros for development projects with Hungary.

While Wen didn't specify the amount of Hungarian bonds China would be willing to buy, Hungary was among several European countries including Greece, Spain and Portugal, to which China has extended a helping hand with bond purchases.

"I have confidence in European economic development," said Wen, who left for the UK on Saturday. "China is a long-term investor in Europe's sovereign debt market. In recent years we have increased, by a quite big margin, our holdings of euro bonds.

"In the future, as we have done in the past, we will support Europe and the euro," Wen added.

His encouraging words came after EU leaders agreed to a second bailout for Greece.

At Friday's EU summit, Greece's prime minister said the deal will stave off default and rescue the country from the clutches of financial markets.

Just back from the summit, Orban said his talks with Wen in Budapest have laid a solid foundation for further cooperation between China and Hungary.

"China's decision to buy our bonds has provided us with a huge sense of security," said Orban. "Then we can continue our economic reform."

With only half the population of the Chinese capital of Beijing, Hungary has also been severely hit by the financial crisis and economic recession since 2008, with a high fiscal deficit and public debt ratio.

Wen and Orban came to the agreement just three or four hours after their walk along the Danube River. Wen said he had significant exchanges with Orban during the one-hour walk. "We need to become friends first before doing businesses," said Wen.

Sandor Kenyeres, president and founder of Talentis Group Hungary, said during the past few years, Chinese economic and trade relations have become more important than ever for Hungary. In several areas, specific agreements have been made and last year, there have been even more frequent exchanges between the two countries.

He said the Talentis Group, which opened its office in Beijing last year, represents one opportunity for China to come to Hungary with its developing high-tech industry and support of the Hungarian state, to enjoy the opportunities inside the EU.

"We would like to contribute to the development of Chinese-Hungarian economic relations," said Kenyeres.

Zhang Chunyan contributed to this story.