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Updated: June 25, 2011 11:00 IST

Chinese prime minister visiting Europe

AP
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Chinese Premier Wen Jiabao. File photo: AP.
Chinese Premier Wen Jiabao. File photo: AP.

Mr. Wen is arriving in Britain on Saturday afternoon from Budapest 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.

Chinese Prime Minister Wen Jiabao is expected to declare support for Europe’s currency during a five—day visit to the continent, analysts said.

Although China has not revealed the exact agenda of Wen’s five—day tour of Hungary, Britain and Germany, its timing - coming as Europe hammers out a plan to battle the eurozone debt crisis - means that a political statement from Mr. Wen in support of the stability of the euro is highly likely.

Mr. Wen is arriving in Britain on Saturday afternoon from Budapest 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 Polit Bureau, 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.

On Wednesday, China’s ambassador to Britain, Liu Xiaoming, reaffirmed that by telling reporters that the country will be a “long—term, responsible and active investor in the EU.” 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 U.S. bonds in the long—term, but it is likely not ready to take the risk of buying significant amounts of Greek or Portuguese bonds, said Marie Diron, head of European macro forecaster at the U.K.—based consultancy Oxford Economics.

She warned that any Chinese help in buying European debt is probably limited to a small amount of financing and will be more effective as a morale—booster than a solution to Europe’s structural problems.

“I would expect some reassuring statements that would defuse some of the current tensions,” Ms. Diron said. “But the problems are mainly eurozone’s own problems. The bulk of financing should and can only come from Europe.”

While in the U.K., Mr. Wen will meet with Prime Minister David Cameron for an annual dialogue and oversee the signing of a series of governmental and business contracts.

The two leaders will also likely discuss the situation in Libya, where a NATO air campaign led by the U.K. and France against Muammar Qadhafi’s regime has reached a stalemate.

China has opposed the bombing campaign and abstained from a U.N. resolution in March calling for all necessary measures to protect Libyan civilians and has urged for a peaceful resolution of the conflict.

“Wen is expected to push for a cease—fire as soon as possible,” said Kerry Brown, head of the Asia programme at London—based think—tank Chatham House.

Mr. Wen is scheduled to visit the MG car plant in Birmingham, England on Sunday. MG, owned by the Shanghai Automotive Industry Corporation, China’s largest carmaker, designs cars in the U.K. but makes its car parts in China. The parts are assembled at the Birmingham plant.

He is also said to have planned a visit to William Shakespeare’s birthplace in Stratford—upon—Avon, although officials said the details are yet to be confirmed.

The 68—year—old Mr. Wen is expected to retire next year amid a major Chinese leadership reshuffle.

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