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Chinese premier offers euro backing

Chinese prime minister Wen Jiabao has offered his country's support for Europe and its common currency amid the eurozone's debt crisis.

Mr Wen said China is a long-term investor in the European sovereign debt market and has purchased a "not small" amount of euro-denominated bonds in past years.

He added that China will offer "consistent support for Europe and the euro".

Mr Wen, on a five-day tour of Hungary, Britain and Germany just as Europe hammers out a plan to battle the eurozone debt crisis, met Hungarian prime minister Viktor Orban in Budapest.

He said China is also willing to purchase bonds issued by Hungary, which does not yet use the euro, and offered Hungary a loan of 1 billion euro (£888.8 million).

"Europe's debt crisis is expanding," Mr Wen said. "Trust is more important than currency and gold and now, during the debt crisis, we again bring trust to Europe. I have total trust in Europe's economic development."

Mr Wen will arrive in Britain later and will end his European visit in Berlin, where he is expected to discuss Europe's debt crisis with German Chancellor Angela Merkel on Monday.

Mr Wen, who is seen as the most pro-Europe leader in the Chinese Politburo, has voiced China's willingness to prop up the region's struggling economies, pledging to buy an unspecified amount of Greek government bonds during a visit to the debt-ridden country in October.

A recent report by Standard Chartered Bank said that Beijing appeared to be buying fewer American assets - a possible sign that the country was pushing more money into European bond purchases.

China is seeking to diversify its foreign investment and reduce its reliance on US bonds in the long term, but it is probably not ready to take the risk of buying significant amounts of Greek or Portuguese bonds, said Marie Diron, head of European macro services at the UK-based consultancy Oxford Economics.

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