China is opposed to 'Grexit'

[Photo/China Daily]

Default on IMF loan puts European nation closer to eurozone exit

China wants to see Greece remain in the eurozone, and there are ways to tackle the country's debt crisis through the efforts of the international community, China's Foreign Ministry and experts said.

"We hope to see that the EU and eurozone can appropriately resolve this issue and Greece can remain in the eurozone. This complies with the interests of all sides," Foreign Ministry spokeswoman Hua Chunying said on Wednesday.

Experts said the missed payment may lead to a downgrade of Greece's sovereign debt rating and spark more debt defaults.

"China will continue to play a constructive role in this regard."

Greece's failure to make a scheduled debt repayment to the International Monetary Fund on Tuesday was the first default by an advanced economy in the fund's history.

"China's direct lending to Greece, in terms of sovereign debt purchases under the bilateral loan agreement, is very limited. It accounts for a small part of all Greek borrowing," said He Maochun, director of the Economy and Diplomacy Research Center of Tsinghua University. The Chinese government has not released information about its total lending to Greece.

Some experts say the missed payment has dragged Greece into a dangerous place as it may be forced to exit the eurozone, a possibility known as the 'Grexit', if Greeks vote "no" on a bailout plan on Sunday.

"As a responsible, long-term holder of Eurobonds and a major trade partner of the EU, China would not like to see Greece leave the eurozone, " He said. "China will continue to talk with EU leaders to find better ways of solving the problem."

Greece, on the Mediterranean coast, is on the route of China's proposed New Silk Road Economic Belt and 21st Century Maritime Silk Road.

"It is an important country because it connects China with Europe through land and the maritime routes. Highways, railways, ports and coastal infrastructure in Greece are major projects for investment cooperation between the countries," said He.