China ready to invest €4-5 billion in Portuguese bonds: report

China, the nation with a swollen foreign currency basket, is prepared to buy Portuguese sovereign debt to the tune of €4 billion to €5 billion to help the debt-laden European nation to prop up its struggling economy, according to a report by Portuguese business newspaper Jornal de Noegocios, yesterday.

"China is prepared to lend as much as €5 billion to Portugal" to "ease the pressure" on Lisbon, the newspaper said without citing its source. It also said that Beijing is looking to buy Portuguese bonds in the first quarter of 2011.

Chinese vice premier Wang Qishan said Tuesday that his country supports the measures taken by the European Union (EU) and the International Monetary Fund (IMF) to create financial stability in Europe. He was speaking at a high level China-EU economic and trade dialogue in Beijing.

Wang further said that China would help some EU members combat the sovereign debt crisis.

Portugal, saddled with a heavy debt burden and a widening budget deficit, is being looked at as the next candidate for a possible international bailout similar to Greece, and recently Ireland. (See: Ireland succumbs to EU, IMF on €85-bn bailout)

The Portuguese prime minister Jose Socrates has been consistently denying the need for an international bailout. The country has adopted a series of austerity measures to bring down the national deficit to 7.3 per cent of gross domestic product from 9.3 per cent in 2009, and further targeting to reduce it to 4.6 per cent in 2011.