China ready to buy Hungary bonds

China again showed its interest for Europe Saturday as Prime Minister Wen Jiabao announced Beijing would purchase Hungarian government bonds and extend a one-billion-euro credit to the country. The announcement came during a visit to Budapest kicking off Wen's second European tour in nine months, even as the continent battles a currency and sovereign debt crisis. At a press conference with his Hungarian counterpart Viktor Orban, Wen announced that China was ready to buy Hungarian government bonds, though he did not put a figure on the deal. The one-billion-euro ($1.4-billion) credit will be extended by the China Development Bank to benefit common projects, Wen told journalists after talks with Orban. China has in recent years invested heavily in Africa, Australia, Latin America and the United States. More recently, Beijing has started moving into Europe, having already invested in Greece and Poland. Just nine months ago, Wen made a first tour of Europe, travelling to Greece, Italy and Turkey. Prime Minister Viktor Orban welcomed the bonds deal as "historic aid" from China. Hungary's finances were now "guaranteed" at least in the medium term, even if the country could generate its own capital on the markets, he added. He hailed the agreement as a "new and very important deal", which would include a dozen projects. Beijing had chosen Hungary as its new "logistics platform", he added. Projects included a collaboration between the Bank of China and Hungarian chemical group Borsodchem, and a new European distribution centre for Chinese technology firm Huawei. China also wants to build a citric acid manufacturing plant in Szolnok, 100 kilometres (60 miles) east of Budapest, with a production capacity of 60,000 tons per year. Chinese company Canyi was looking to build a European production centre for lamps, although its location has yet to be decided. China and Hungary also signed more general deals to develop transport, promote investment and create several cultural centres. Ahead of the visit, Hungary's Minister of National Development Tamas Fellegi had said Budapest hoped to become a "stepping stone" for China in Europe, as a logistics and commercial distribution centre. China, the world's second largest economy, has already started to rebalance its commercial and financial relations, today tilted toward the United States and Japan, more towards Europe. Wen Jiabao arrived in Budapest Friday on the first leg of a European tour that will also take him to London and Berlin. This was the first visit by a Chinese leader to Hungary in 24 years, Wen noted, but he insisted that relations between two countries had "very solid foundations". Despite the changes that have occurred over the past quarter of a century, "the friendship between China and Hungary has remained intact", he said. The Chinese leader also invited 150 Hungarian youths to visit China to further promote cultural ties. He was to meet with Hungarian President Pal Schmitt later Saturday. Wen was accompanied in Budapest by a large Chinese contingent that included 300 business delegates and a 110-strong press service.