China opinion scorns Greek bond idea

Greece's Prime Minister George Papandreou attends a session at the World Economic Forum (WEF) in Davos January 28, 2010.

BEIJING (Reuters) - If Beijing's decision whether to buy Greek bonds depended on public opinion, Athens might as well skip China during its planned investor roadshow through Asia.

Although China has repeatedly said it is keen to diversify its $2.4 trillion (1.48 trillion pounds) in foreign exchange reserves, now predominantly parked in dollar assets, taking a punt on Greek debt would be a leap too far, according to Chinese media, academics and bloggers.

"The risk of buying Greek bonds is great. From a market point of view, I wouldn't vote for the deal," Tan Yaling, the China economist for MG Financial Group, was quoted by the Southern Metropolitan Daily as saying.

Global markets have been shaken by speculation that Athens, a member of the euro zone, will be unable to service its heavy debt.

Finance Minister George Papaconstantinou on Thursday again denied media reports that Greece had struck a deal for China to buy up to 25 billion euros (21.6 billion pounds) of its bonds and said Athens was still overwhelmingly looking to Europe for its debt-raising.

China, which is not shy about using its financial muscle to advance its interests around the world, has made no official comment on whether it might buy Greek bonds.

But Sun Lijian, a professor with Fudan University in Shanghai, urged caution.

"We shouldn't blindly listen to what others say. We shouldn't be conservative, but nor should we neglect the risk of acting in a hurry," Sun wrote on his blog.

"If we buy the bonds in ignorance and Greece's sovereign rating continues to worsen, we might lose our precious foreign exchange wealth," he added.

Zhang Xiaojing, a researcher at the Chinese Academy of Social Sciences (CASS), the government's leading think-tank, agreed.

"After all, there is uncertainty about whether Greece will be able to pay back its debts. I think Beijing will be relatively cautious about buying any of these bonds," Zhang told Reuters earlier this week.

The suggestion that Beijing might ride to Athens' rescue prompted mostly angry reactions in online chat rooms.

Li Delin, an influential Chinese writer, described Greek debt as a "poison pill" for China.

"The Chinese people are poor. Why should we waste money on these treasury bonds?" a comment on the Chinese Internet portal 163.com read.

One-party China pays close attention to online opinion on some issues, notably criminal acts and corruption.

The poor performance of stakes taken by China Investment Corp, the country's sovereign wealth fund, in Wall Street firms drew a torrent of criticism that did not escape the attention of senior officials.

"What can we get back from 20 billion euros? Nothing but a good feeling about China in Europe for about a month -- that's it," blogger Liu Bin wrote.

However, some took the view that China should buy at least some Greek bonds for political reasons.

"China shouldn't let Papaconstantinou go home empty-handed. If we do them a favour by giving a drop of water when they're in difficulty, they might reward us with a fountain of water when Greece is prosperous again," Tan Haojun, another blogger, wrote.

(Reporting by Zhou Xin, Aileen Wang and Alan Wheatley; Editing by Jacqueline Wong)