【华尔街日报 09.01】Spain Reaches Out to China on Government Debt

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Spain Reaches Out to China on Government Debt
BEIJING—Spain hopes China will increase its investment in Spanish government debt, Prime Minister José Luis Rodríguez Zapatero said on a visit to Beijing, highlighting China's importance as a source of global capital.
Mr. Zapatero made the comments in a group interview with Chinese media Tuesday, during a brief stop in Beijing after visiting the World Expo in Shanghai.
"We definitely hope that China will continue to increase its holdings of Spanish government bonds," he said, according to a recording /of the interview. "China has indeed increased its holdings of Spanish government bonds. This in fact has injected confidence to the market. I think it is a wise decision."
Mr. Zapatero didn't elaborate. A spokesman at the Spanish embassy in Beijing said China bought €400 million of Spanish government bonds in July.
Mr. Zapatero held a meeting later Tuesday with Chinese Premier Wen Jiabao, after which Chinese state media cited Mr. Wen as saying he hoped the two countries could work together promote growth of trade and investment. There was no indication that China had committed to increasing its investment in Spanish debt.
The bond issue didn't appear to be the focus of Mr. Zapatero's visit. The prime minister's comments on the issue were limited to a few sentences during the interview with Chinese media.
Earlier this year the crisis of confidence in Greece's public debt threatened to spread to Spain, where high levels of government borrowing and a faltering economy prompted investors to reassess the cost of lending there.
Spain has moved to aggressively cut spending since then, with the government's budget deficit for the first seven months of the year almost half that of the same period in 2009. Still ,economic growth remains sluggish with the country's gross domestic product in the second quarter up 0.2% from the previous quarter. It grew 3.7% for the whole of 2009.
Mr. Zapatero's statement reflects how China is increasingly seen as a source of capital by global corporate and political leaders, thanks to its massive pile of foreign-currency reserves, which is by far the largest in the world, totaling $2.454 trillion at the end of June. The majority of China's holdings are invested in Treasurys and other U.S. dollar assets, but the government has made efforts to diversify into other currencies and asset classes in recent years, and companies and governments have sought to take advantage of that.
The State Administration of Foreign Exchange, which manages the reserves, and China Investment Corp., the nearly three-year-old fund set up to manage a $200 billion chunk of the reserves more aggressively, are both constantly approached by foreign companies soliciting investments, according to people familiar with the funds.
Earlier this year, the Greek government approached the Chinese reserves managers about buying its bonds during that country's sovereign-debt crisis. And in February last year, during her first visit to China as U.S. Secretary of State, Hillary Clinton praised China for its ongoing purchases at a time the U.S. was concerned about how it would fund its planned stimulus spending.
Write to Dinny McMahon at dinny.mcmahon@wsj.com and Jason Dean at
原文链接：http://online.wsj.com/article/SB10001424052748703882304575464983864382668.html?mod=asia_home

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