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China ‘to buy Italian bonds’ to ease debt crisis
Business digest: Italy hopes for ‘significant’ bond sale to Chinese sovereign wealth fund
ITALY has turned to the China Investment Corp, one of the world's largest sovereign wealth funds, to ease its debt crisis, according to a report in the Financial Times.
The Italian government hopes that high level negotiations in Rome and China over the last month will lead to a "significant" purchase of its bonds and investments in strategic companies.
Italian public sector debt is forecast to reach 120 per cent of GDP this year - second only to Greece among eurozone economies. The result has been that the yield on Italian bonds has been rising to painful levels.
Mark Young of Fitch Ratings told the BBC: "When you introduce a large buyer like China, it brings down the interest rate. They can then fund their economic growth more easily."
Markets in the US received the news well yesterday, recovering earlier losses. But in Asia today, the markets were mixed, with investors questioning whether Chinese money would really help Europe's debt problems.
Read a full report at the BBC. ·
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Western nations through their profligate spending are now indebted to the Chinese. Very shrewd and long term thinking of the Chinese, very stupid and short term gratification by the western nations.