China has 'confidence' in the euro despite crisis

China said Wednesday it remained confident in the euro despite the deepening debt crisis and considered the European financial market as one of its "primary investment destinations".The comments by foreign minister Yang Jiechi came after Beijing signalled it would further diversify its massive foreign exchange holdings away from the dollar after the US government pushed through a deal to borrow more money."China has always maintained confidence in the euro zone and the euro and treated the European financial market as one of its primary investment destinations," Yang told journalists during a trip to Albania."China believes that a prosperous and stable Europe is important for world stability and development," Yang said, according to a statement posted on the foreign ministry website."We support the proactive measures adopted by the EU and the IMF to bring stability and growth back to Europe."China has previously backed efforts to rescue debt-laden European economies -- key buyers of Chinese exports -- and has vowed to buy euro-denominated sovereign bonds to help the region resolve the crisis.Yang's public support for the euro comes after US President Barack Obama finally signed an emergency bill on Tuesday that averted what would have been a disastrous debt default for the world's biggest economy.China's official Xinhua news agency -- a mouthpiece of the government -- warned that tortured efforts to raise the US borrowing limit had failed to defuse Washington's "debt bomb".Central bank governor Zhou Xiaochuan delivered a more measured statement and welcomed the deal, but indicated China would further diversify its holdings away from the greenback.China, sitting on the world's biggest foreign exchange reserves of around $3.2 trillion as of the end of June, is the largest holder of US Treasury bonds.China Investment Corp, set up in 2007 to invest a chunk of the country's hefty foreign-exchange stockpile, has been trying to diversify since the global financial crisis struck in 2008.The $400-billion sovereign wealth fund has been increasing its already substantial holdings in European bonds to get better returns but exact figures on the size of China's euro holdings are hard to find.Analysts estimate its stockpile is relatively small, with most of it in large countries such as Germany and France.