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China eyeing wholesale purchase of Italy?
Published: 13 September, 2011, 14:05
Edited: 13 September, 2011, 19:59
BEIJING : Visitors have their photos taken at Tiananmen gate in Beijing on August 17, 2011. China has allowed its currency to hit a series of record highs against the USD over the past week in a move analysts say may signal a new strategy to combat the growing threat of inflation. (AFP Photo/Peter Parks)
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With Italy second only to Greece in the Eurozone in terms of its debt-to-GDP ratio, the Italian government is eyeing China as a possible source of cash to alleviate its budget deficit.
According to Italian officials, Lou Jiwei, chairman of China Investment Corp, one of the world's largest sovereign wealth funds, led a delegation to Rome last week. He met with finance minister Giulio Tremonti, and Italy's Cassa Depositi e Prestiti, a state-controlled entity that has established an Italian Strategic Fund open to foreign investors, reports the Financial Times.
Italian officials were in Beijing two weeks ago to meet CIC and China's State Administration of Foreign Exchange (Safe), which manages the bulk of China's $3,200bn foreign exchange reserves. Vittorio Grilli, head of the treasury, met Chinese investors in Beijing in August. Italian officials said further negotiations were expected to take place soon.
How much of Italy's 1,900 billion euro of debt is already in China’s possession is not immediately clear. The Financial Times cites Italian officials as saying that Beijing holds about four per cent.
The Eurozone is undergoing a financial crisis, with several members with overreaching national debts having turned to their richer neighbors for bailouts. The EU has demanded austerity measures and privatization of state funds in return for emergency loans. The measures have provoked public unrest in several countries, including Greece and Italy.
Despite all the cash poured into the crippled European economies, the risk of default and a chain reaction jeopardizing financial institutions is still looming over Europe.
13.09.2011, 13:20
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13.09.2011, 14:29
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The faith or stable of the world financial markets, we [Asia countries] have to save euro even though we [Asia countries] do not like it because we [Asia countries] are not ready to move away from euro and green-backs.
In the long-run, euro and green-backs do not think about bail out money from Asia countries again.
This is our last money.
Why does Italy ask China and not the USA for whom it went to the war against Libya? At first Italy had enough money to go to the war for USA(Israel) and when to USA's pleasure NATO cuts China from resources and China looses contracts valued 1.5 billion Euro Italy dares to ask for help? Price for Italy should be very high and China should negotiate hard and tough in this case for sure. Perhaps Italy should help China to negotiate all chinese contracts in Libya back before NATO's invasion or perhaps China might not like army bases in Italy etc. possibilities are endless. Perhaps China should buy Italy's airports before Yanks will. Etc. Etc.Shame this didn't happened earlier this year and Italy didn't ask for money before the war against Libya six Months ago.
CHINA BUYS ITALY
Italians to pay off their debt in Pizzas.