ITALY’S FINANCE MINISTER has begun talks with Chinese officials in the hopes that Beijing will agree to buy a large amount of Italian bonds – as the country struggles to find ways to disentangle itself from the eurozone debt crisis.

Italy is desperately trying to avoid following in the footsteps of countries like Ireland and Greece, which were forced to ask the EU/IMF for a bailout. The markets are demanding increasingly higher yields to buy Italian public sector debt, with forecasts indicating that they will reach 120 per cent of GDP this year, reports the Financial Times.

Italian Minister for Finance Giulio Tremonti met with a range of Chinese representatives last week, including the chairman of the China Investment Corp (CIC) sovereign fund, Lou Jiwei, to discuss the possibility of the fund buying Italian bonds, reports the Wall Street Journal. CIC is one of the world’s largest sovereign wealth funds, with about $410 billion in assets under its management, including stocks in a wide range of western countries.

As well as Italy, countries like Spain, Greece, Portugal – and even the investment bank Morgan Stanley – have turned to China for help since the 2007 economic collapse, Bloomberg reports. However, it is unclear whether the cuurent talks will materialise into anything concrete, as cash-rich China’s purchase of peripheral European debt has actually been relatively small so far.

The Italian senate has recently passed an austerity package aimed at reducing the country’s deficit by more than €54 billion over three years.

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