By Daily Mail Reporter
Last updated at 8:12 PM on 23rd December 2010
China has said it is willing to bail out debt-ridden countries in the euro zone using its $2.7trillion overseas investment fund.
In a fresh humiliation for Europe, Foreign Ministry spokesman Jiang Yu said it was one of the most important areas for China's foreign exchange investments.
The country has already approached struggling European countries with financial aid, including offering to buy Greece's debt in October and promising to buy $4billion of Portuguese government debt.
Today Portugal had its credit rating downgraded by the Fitch Ratings agency amid mounting concerns over the country's ability to raise money in the markets to finance its hefty borrowings.
Fitch said it was reducing its rating on the country's debt by one notch to A+ from AA- and warned that further downgrades may be in the offing by maintaining its negative outlook.
'To have any discernible effect China will have to buy a lot more than 5billion euros if they expect to have any impact on the negative sentiment surrounding Europe,' said Michael Hewson, currency analyst at CMC Markets.
China's astonishing economic growth has put it on track to overtake America as the world's economic powerhouse within two years, a recent report claimed.
But experts believed still be some years before America's leadership role is really challenged - largely because Beijing has given no indication it is ready to take on the responsibility of shepherding the world' economy.