China's premier offers Europe investment, wants Greece in euro zone

finance.yahoo.com

By Robin Emmott

BRUSSELS (Reuters) - China used an EU summit on Monday to promise to invest in the bloc's new infrastructure fund, call for a global climate deal and warn it did not want to see Greece leave the euro zone.

Premier Li Keqiang, in Europe on a day when financial markets took fright that Greece might leave the euro, said China and the world wanted to see Athens remain in the currency area and that China would continue to buy euro zone debt.

Following his first summit with top EU officials, Li declined to say whether Beijing could come to Greece's aid with loans, but commented: "China is ready to play a constructive role." 

Li struck a positive note at the meeting with the new heads of the European Commission, Jean-Claude Juncker, and of the European Council of EU leaders, Donald Tusk, saying China was ready to invest in the European Union's new 315 billion-euro infrastructure fund.

"China's decision to participate is a grand one," Li said, although he declined to say how much Beijing would spend.

"China has ample foreign exchange reserves," he added, also suggesting the creation of an additional joint EU-China investment fund. 

The pledges follow decisions by EU governments to join the Chinese-led Asian Infrastructure Investment Bank (AIIB), in defiance of Washington.

But the Greek crisis overshadowed the summit. Juncker arrived late for a business conference before the formal start of the summit, where he shared the podium with Li, saying: "Don't blame me, blame Greece." 

Li, essentially the man in charge of China's economy, the world's second largest, said China wanted a strong euro zone.

"It is in China's interest. We would like to see Greece staying in the euro zone and we urge the international creditors to reach an agreement with the Greek side," he said.

The European Union is pushing for a new global deal on climate change at U.N. talks later this year, hosted by France. China is responsible for around 25 percent of all greenhouse gas emissions.

Li said China would submit to the United Nations by Tuesday a promise to cut emissions. It is expected to pledge that they will peak "around 2030" and officials and analysts say it can easily achieve that.

China and the European Union "must step up their cooperation ... to establish a fair, reasonable, win-win global climate governance system," Li said.

(Additional reporting by Ben Blanchard in Beijing; editing by Andrew Roche)