Published January 08, 2013
BEIJING – Chinese officials remain worried about the state of the euro, the visiting French finance minister said on Tuesday, while repeating assurances the euro zone has stabilized and that France is on track for recovery.
Pierre Moscovici, in Beijing for a one-day visit, said concerns over the future of the euro came up in all his meetings, even as the French side sought to attract Chinese investment, further nuclear cooperation and promote Paris as a place to do business in Chinese yuan.
"There was one point that came up in all our discussions, which I had to hammer away at because I am convinced. I sensed a strong question still remains here, perhaps due to a misunderstanding or a lack of information," he told reporters.
The questions on the state of the euro came from China's future premier, Li Keqiang, as well as from Lou Jiwei, the head of sovereign wealth fund China Investment Corp (CIC), Moscovici said.
"China has helped sustain the euro since the beginning, and it took a position in the euro during a difficult time. At the time there was both support and concern," he added.
"The support remains. The concern is only partially dissipated, but not totally."
CIC officials have said as recently as last month that they were not optimistic about the outlook for the debt crisis in the euro zone. China has picked up infrastructure assets in Europe but has been more cautious about bond purchases especially from the more troubled euro zone members.
For their part, the French are eager to include Paris in China's gradual internationalization of the yuan for the convenience of companies doing business in China, although they have yet to negotiate concrete steps with Chinese authorities.
Paris already claims 10 billion yuan in bank deposits, second only to London among European countries, and up to 10 percent of Sino-French commerce is conducted in yuan, said delegation member Arnaud de Bresson, chief executive of financial services industry group Paris Europlace.
Moscovici said the recent successful auction of French bonds shows that there is confidence in the French economy, even as it and the rest of Europe face an especially difficult year.
France's long-term bond yields fell in the Treasury's first debt sale of the year on January 3, as high appetite for liquid French debt outweighed a sovereign downgrade in November by Moody's rating agency.
"There is in my view no worry for the French economy if we do the job, and we are doing the job," he told students at one of China's top universities, referring to the task of reducing France's structural deficit and creating more jobs.
The recent bond sale "shows there is huge confidence in the market in the French economy," he added.
Moscovici has said the French government will stick to its 3 percent deficit target and 0.8 percent growth target in 2013, although international institutions and economists predict the deficit will be about 3.5 percent while growth will be much lower than 0.8 percent.
(Reporting By Lucy Hornby; editing by Ron Askew)