China is opposed to 'Grexit'

Pensioners shout slogans during a protest outside the Finance Ministry in Athens, Greece, July 1, 2015. Greek Prime Minister Alexis Tsipras has written to international creditors saying Greece could accept their last bailout offer if some conditions were changed, but Germany expressed scepticism while saying the door was still open for negotiations. [Photo/Agencies]

Chen Xin, director at the Economics Department under the Institute of European Studies of the Chinese Academy of Social Sciences, said if the Greek debt crisis continues to escalate, it might derail the global economic recovery and damage the long-term viability of the euro as a currency.

"It is possible that the Greek government will take serious control of capital flows if the country exits the eurozone, and our companies will not be able to freely exchange capital back to China, which would mean their invested projects might face big losses."

Chen suggested Chinese companies re-evaluate investment risks in Greece.

The Chinese government has once injected capital into the IMF bailout fund to support the debited country, and this time the "indirect measure" may be considered, he said. "But it is a more complicated political issue and full of uncertainties."he added.

According to the Ministry of Commerce, Sino-Greek bilateral trade volume was $4.53 billion in 2014, an increase of 24 percent year-on-year. China's direct investment in Greece was around $1.3 billion last year.

"The Greek debt issue is crucial for Europe, and its implications for China are also important, given it is a very large market for China," Ayhan Kose, director of the Prospects Development of the World Bank Group, said on Wednesday in Beijing.

The World Bank's updated forecast for eurozone GDP growth is 1.5 percent this year and 1.8 percent in 2016, despite the Greek crisis.

"We are very pleased to see that the eurozone recovery is speeding up, as the quantitative easing policy is working and deflation risk is diminishing," said Kose.