The People’s Bank of China, which is China’s central bank, announced plans to create a new investment vehicle worth $300 billion with the aim of managing investment funds that are in the US and Europe.
The purpose is for China to improve returns on its foreign exchange reserve, which is the largest in the world.
This new investment plan by China is good news for Europe and any investments from the world’s second largest economy would be beneficial to an ailing European economy.
Such an investment vehicle could provide much-needed funding to heavily indebted euro zone countries, helping tackle the region’s debt crisis. It suggests it will make funding conditions easier for struggling euro zone countries.
The euro rose 1.3432 against the dollar after the news report by Reuters , helping lift the single currency from a low of 1.3280.