China sees Europe as ‘too important to fail’

[xchrom]

http://www.marketwatch.com/story/china-sees-europe-as-too-important-to-fail-2011-09-13

HONG KONG (MarketWatch) — Speculation that China may help rescue peripheral European debt markets is consistent with Beijing’s strategic interests in the region and a prudent backstopping of its euro-denominated investments, analysts say.

Reports on Monday from The Wall Street Journal and Financial Times said Italy’s finance minister met last week with a delegation of Chinese officials — including the head of China’s sovereign-wealth fund — in an attempt to persuade Beijing to buy a large amount of Italian sovereign debt. Read WSJ.com report on China-Italy meeting.

Asia analysts said Tuesday that the reports had the ring of credibility, as a Chinese bailout of peripheral euro-zone nations would boost Beijing’s stature within Europe while also helping to shore up one of the few markets that offers a viable alternative to the U.S. dollar.

“It has benefits for them and obviously improves their standing with the Europeans,” said Royal Bank of Canada analyst Brian Jackson in Singapore.

[On the Road]

1. Uh, Oh, Got to Break Up Europe Again

They are "too big to fail."

[xchrom]

2. Italian government 'in bond buying talks with China'

http://www.bbc.co.uk/news/business-14892553

China's largest sovereign wealth fund is considering buying Italian assets, according to reports in the Financial Times and the Wall Street Journal.

China Investment Corporation (CIC) and Italian officials have held meetings in the last month, the reports said.

CIC is wholly owned by the Chinese government and has an estimated $400bn (£250bn) in assets.

The news comes at a time when the cost of borrowing for the Italian government has reached record highs.

[saras]

3. But not America. We're too big to succeed.