Description:  “From the outbreak of the sovereign debt crisis in certain European countries at the start of this year I have repeatedly voiced China’s support of measures adopted by the European Union and International Monetary Fund,” said Wen, who began a tour of European capitals in Greece yesterday. “China supports a steady euro and it will not be reducing its European bond holdings.”

Source: Bloomberg.com
 
Date: 10/02/2010

Link: http://www.bloomberg.com/news/2010-10-01/china-s-wen-visits-greece-to-sign-cooperation-deals-show-confidence-in-eu.html

Questions for discussion:

• What are the immediate consequences of the Chinese investments in Greece?
• How can Greek bonds be expected to react, as a result of the Chinese involvement?
• What do you think is motivating the Chinese investment strategy?
• What would your recommendations be to investors under these new circumstances?
• Do you think this development will affect the financial markets of other European countries that are facing economic challenges, such as Ireland and Spain?
• How will this development affect currencies?