As reported by Wall Street Journal’s Dinny Mcmahon and Tom Orlik, China‘s government isn’t likely to ride to the rescue of the debt-hobbled Italian government, analysts said, after news of meetings between Chinese sovereign-wealth officials and Italian leaders fueled a short-lived rally in world markets. The associated topic will be discussed at Golden Networking‘s China Leaders Forum 2011, October 7.
Italy’s Finance Ministry, in a bid to persuade Beijing to buy large amounts of Italian bonds, last week met with Lou Jiwei, chairman of sovereign-wealth fund China Investment Corp., and officials from China‘s State Administration of Foreign Exchange, which oversees China‘s currency.
The two Chinese organizations, which typically don’t disclose details of their investments, declined to comment Tuesday on whether they would act on the offer. Foreign Ministry spokeswoman Jiang Yu said Tuesday that while China has confidence in the stability of Europe and the euro, it hopes the European Union can take effective measures to ensure the safety of Chinese investments on the continent.
Still, reports of the meeting Monday fueled investor hopes that it would result in help for Italy. The Dow Jones Industrial Average rose 0.6% on Monday, reversing losses earlier that day.