voice_cd Post time 2011-9-14 09:29:41

Italy asks China to buy its bonds, Yes or No?

BEIJING - China's potential purchase of Italian bonds may help diversify the world's largest foreign exchange reserves and boost investor confidence in European markets, some analysts said.

But others doubted whether China would actually go ahead with the purchase.

Speculation on a bond purchase arose after Italian Treasury spokesman confirmed on Tuesday that Italian Economy Minister Giulio Tremonti met Chinese officials last week.

The Financial Times reported that Italy, the euro zone's third-largest economy, had asked China to buy "significant" quantities of its debt.

St_George Post time 2011-9-14 10:04:49

I think all eye's are on Greece right now, some commentators say they are on the brink of defaulting and possibly even about to be ejected out of the Euro.

If that happened there could be a domino effect, with other EU nations mired in deficit and French banks in particular holding a big stake in Greece.

desperado123 Post time 2011-9-14 13:35:58

The problem here is that when our Chinese people toil in the export-oriented factories, Italian civilians are enjoying their Mediterranean beach , and why we cost our sweat credits to buy the broken bonds?

greatlady Post time 2011-9-14 14:18:10

Originally posted by desperado123 at 2011-9-14 13:35
The problem here is that when our Chinese people toil in the export-oriented factories, Italian civilians are enjoying their Mediterranean beach , and why we cost our sweat credits to buy the broke ...

I voted yes cause our government is more powerful and strategic.

NE_Tigress Post time 2011-9-14 14:26:30

Originally posted by desperado123 at 2011-9-14 13:35
The problem here is that when our Chinese people toil in the export-oriented factories, Italian civilians are enjoying their Mediterranean beach, and why we cost our sweat credits to buy the broken bonds? .

Are you saying that falling or bankrupt western countries will benefit those "toil in export-oriented factories"?  :o :(

Everynowhere Post time 2011-9-14 15:29:32

I voted yes because China should absolutely diversify its assets. The EU has been China's biggest trading partner for years, yet PBOC still mostly stores US-Dollars while the US have been having a twin deficit for years.

Of course, China shouldn't buy too many Italian bonds - I belive a share of for about 250 billion Euros would be best. In total, China should focus on inveting for about 50 percent of its assets into Euros, 40 percent into Dollars and 10 percent into Yen to reflect the trading partner's structure and maintain national and global stability. The current policy under which nearly 75 percent of China's assets are invested in US-Dollars is something very dangerous - China (and China's inflation) totally relies on the FED's decision and the US inflation rate.

greendragon Post time 2011-9-14 16:08:55

Reply #1 voice_cd's post

These could mean CHINA can be the world's Banker!

Might as well ensure that the BONDS issued by EU states can be TRADED in the open market.
The State SAFE would find the bonds more liquid.

There is also INFLUENCE to be gained from such a position.
States from Africa, to ASEAN, Latin American States and on occasion Korea, Indonesia has a habit of DEFICIT balance of payment.

Cheerios!

Green DRagon
Game Grandmaster
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