China's CIC brushes aside Merkel investment plea

"For European bonds like the government bonds of Italy and Spain, only central banks with certain responsibilities can invest," he said.

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"But it's more difficult for long-term investors like us to make (such) investments," he told the annual meeting of China Economists 50 Forum, a club of government officials and economists.

"Investment opportunities may lie in areas like infrastructure and industrial projects, and these projects can help economic recovery," he said.

A central bank adviser echoed Lou's harder line on buying European government debt.

"We may be poor, but we aren't stupid," Xia Bin told reporters on the sideline of the forum. "We must follow commercial principles in making such investments. That means we want returns."

Lou, who predicted Europe will "inevitably" fall into recession, said Merkel had asked CIC to buy European government debt, including that of France and Germany.

Reflecting Lou's comments on infrastructure, CIC recently bought a minority stake in London water supplier Thames Water.

During a visit by Merkel to China this month, Premier Wen Jiabao had said Beijing was considering increasing its participation in rescue funds set up by the European Union to help ease the debt crisis, although he didn't make any explicit commitments.

Pointing to the tone that China is more likely to adopt at its summit with senior EU officials on Tuesday, the People's Daily said in a front page commentary that the interests of the world's second-biggest economy lay in selflessly helping Europe.

"China has no appetite or ability to 'buy up Europe' or 'control Europe' as some European commentators have said," wrote Feng Zhongping, director of the Institute of European Studies at the China Institute of Contemporary International Relations.