Wen said that China is an investor in the long term in European debt, confident Euro - Bloomberg

Prime Minister Wen Jiabao said that China will continue to invest in Europe's sovereign bond market, offering a vote of confidence in the region résonnée by the debt crisis.
"China has increased the purchase of bonds in some European countries, and we do not reduce our euro Fund," Wen said yesterday the British Broadcasting Corp. in an interview. "I think that these show our confidence in the economy of Europe and the euro area.".
Wen, 3 billion of the country, including in foreign currency reserves are high, is now due to meet with U.K. Prime Minister David Cameron in London as European policy makers enter another week of talks on how the Greece can be avoided by default. Greek lawmakers vote this week on a package of austerity required to obtain more international aid, while elsewhere on the continent, Governments negotiate with banks on how they can help the country.
China's leader is visiting Europe as renewed investor concern the ability of the nations of the euro area – to beat the debt crisis which has occupied the minds of officials from more than a year. European stocks fell for an eighth week last week, the longest stretch of losses since 1998, and the euro weakened to a case against the Swiss franc in Greece speculation will be unable to pay its bills.
"China is ready to work with Europe to share opportunities, address challenges and achieve common development, and make unremitting efforts for stable development of the global economy and a depth of China-Europe ties," Chinese State Xinhua News Agency quoted Wen as saying that on 25 June.
Support of the Spain
This is not the first time Wen expressed a support for Europe's cash-strapped nations. He said in April that China would invest in the bonds and the Spain savings bank industry and will continue to buy debt.
The visit of Wen will help "convince the market that China will provide a back-stop contagion" and therefore lend support to the euro, Douglas Borthwick, head of Foreign Exchange based in Stamford, Connecticut Faros Trading, said in a report on 20 June.
China plays a role of "white knight" in helping Europe and itself purchase of good will to buy more sensitive European assets such as technology firms, according to Faros Trading. Asian country purchases of debt in euro also helps diversify its dollar reserves, said the dealer.
Contrast positive comments from critical Wen week last to the strategy of Europe by other international decision makers. US Secretary of Treasury Timothy f. Geithner said that the region should speak of a "clearer and more unified voice", while that the Bank of England Governor Mervyn King said that he must realize it is dealing with a solvency problem not liquidity.
Today talks in London will focus on trade, the British Government seeks to boost trade with China to 100 billion dollars by 2015, Office of Cameron said in a statement. Downing Street said the two countries also are defined to make it easier for British companies branch Beijing and Shanghai and that China will open its market to exports of poultry U.K. again.
Wen, who visited the home town of William Shakespeare, Stratford-Upon-Avon and visited a car factory owned Chinese yesterday, will also deliver a speech before you go to Germany. In Budapest, he promised to buy a "definite" Hungarian obligations and extend a loan of 1 billion $-euro ($1.4 billion) through the development of the China State Bank to fund projects in Hungary.
To contact the reporters on this story: Zoltan Simon Budapest to zsimon@bloomberg.net Simon Kennedy in London at skennedy4@bloomberg.net.
To contact the responsible editors of this story: Craig cstirling1@bloomberg.net Stirling. Balazs Penz in bpenz@bloomberg.net;

Bernanke pushes more confident in recovery (Reuters)

WASHINGTON (Reuters) - U.S. economy may finally be hitting his stride even if growth remains too low to make a dent real unemployment rate in the nation, the Federal Reserve Chairman Ben Bernanke said Friday.

Offer no real clues about the future direction of monetary policy, Bernanke sounded more optimistic caution that he had in his most recent public remarks. He cited improvements in consumer spending and a decrease in claims of unemployment as signs of hope, a sluggish recovery was perking up.

"We have seen increasing evidence that autonomous resumption of consumer and business spending can take hold," the head of the Central Bank said first testified to Congress since the Fed has launched a controversial plan to buy 600 billion in government bonds.

Just a month ago, in an interview on program CBS "60 Minutes, Bernanke expressed trepidation on rebound of the economy."

His remarks Friday were made public one hour after the Government said the economy has generated a disappointing jobs 103,000 in December.

Bernanke, who said that it would take four or five years for the labour market to return to normal, showed no penchant for cutting short purchase program of the Fed, bond designed to stimulate the economy. But it has also offered no advice to buy more beyond June Date limit of the program.

"The Fed will not rush to exit," said Tullett Prebon Economist Lena Komileva. "The potential for more (relief) remains so low labour and housing activity continues to push inflation trends."

Financial markets, which focused on new employment, data showed little reaction to Bernanke remarks.

The U.S. unemployment rate fell to 9.4% in December, the lowest rate since May 2009 and down from 9.8% a month earlier, but the decline was partly due to a worrying increase in the number of people leaving the workforce.

Echoing Bernanke, Fed Board Governor Elizabeth Duke said in a separate speech that recovery seems to be gathering steam, but hiring and inflation remain likely controlled.

"I am encouraged by signs that recovery may have gained traction recently," says Duke.

Improvement of the economic backdrop prompted investors from Wall Street to begin to think about a possible reversal in policy by the Fed, by the end of this year. In summer, few expected anything of monetary tightening until at least 2012.

Underscoring the persistent concern about the Fed on a deep hole how Economics must climb, another official pointed out that the bond purchase program was needed to lift a recovery that was too low for the tooth of high unemployment.

"Latest data come a little stronger," Chicago Fed President Charles Evans said in a speech. "But they do not yet indicate the kind of robust recovery, self-perpetuating we need to fill gaps in large resources of today within a reasonable time."

Evans is one of the staunchest supporters of aggressive Fed actions to stimulate growth and an elector on Panel of parameter of the strategy of the ECB in 2011.

DEFLATION RISK MORE SMALL, NOT GONE

In his testimony before the Senate Committee's Budget, Bernanke defended bond purchases the Fed by highlighting the weakness of employment and that it considered the risks associated with the very low inflation rate.

"High unemployment, the household income amortization and confidence, which could threaten the strength and sustainability of the recovery," said Bernanke.

"Very low inflation increases the risk that new shocks could push the economy into deflation." "Deflation induced economic slack can lead to prolonged periods of poor economic performance".

Many conservative Republicans blasted the bond purchase plan risking inflation. However, the tone of the hearing, was largely respectful, while the Jim Sessions of said Alabama Republican Senator that he does not share confidence from Bernanke that the Central Bank would be able to withdraw its relaunch over time.

Addressing the budget deficit, something hot in Washington, now that the newly empowered Republicans push cuts, Bernanke expenses urged lawmakers approach a remark.

"Fiscal policy makers will need to continue to take into account the low level of economic activity and nature still fragile economic recovery," he said.

At the same time, Bernanke come hard on what he describes as a unsustainable fiscal path over the long term.

"Doing nothing is not an option," Bernanke said. "Lowering the confidence investors deficits will be brought under control would likely increase the rate of interest on government debt and possibly to the wider financial turmoil."

He threw his support behind the proposals for reform of the tax code saying at lower rates and fewer faults were necessary to make the system more efficient.