By Bloomberg News
Europe and the euro will remain among the most important areas of investment for Chinaâ€™s world-record $2.65 trillion of foreign-exchange reserves, a central bank official said in the nationâ€™s latest show of support.
â€œThe euro and the European financial markets are an important part of the global financial system and were, are and will be one of the most important investment areas for Chinaâ€™s foreign-exchange reserves,â€ Deputy Governor Yi Gang said in a statement on the central bankâ€™s website.
Chinaâ€™s statements of support have included Vice Premier Li Keqiang this week expressing confidence in Spainâ€™s financial markets and pledging more purchases of that nationâ€™s debt. In backing European economies, China may help to prop up demand in the region that is its biggest market for exports and also the value of its euro-denominated assets.
â€œIn the short term, the market will take this as supportive to the euro,â€ said Mark Williams, a London-based economist at Capital Economics Ltd. â€œThe problems of the euro zone are structurally deep-rooted and not something that China will be able to solve.â€
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