GREECE IS wooing China to buy up to €25 billion of government bonds, a move that underlines Beijing’s growing financial power, as Athens struggles to fund soaring public debt.

Goldman Sachs, the US investment bank, has been promoting a Greek bond sale to Beijing and the State Administration of Foreign Exchange (Safe), which manages China’s $2,400 billion foreign exchange reserves, said people familiar with the issue.

Gary Cohn, Goldman Sachs chief operating officer, has made two trips to Athens – last November and this month – to meet the prime minister, George Papandreou, and senior officials.

Beijing has not agreed to such a purchase. Meanwhile, Athens has rejected a suggestion that a Chinese bank should acquire a strategic stake in National Bank of Greece, the country’s flagship commercial lender.

But a more modest deal of about €5 billion-€10 billion appeared possible after Mr Cohn’s second trip to Athens, officials said yesterday.

Finance minister George Papaconstantinou said he would visit China on a road show next month, but “no target is set” for a debt placement.

China’s foreign exchange reserves grew $130 billion in the last quarter of 2009 alone. But people close to Safe said China already held a “significant amount” of Greek debt and was wary of adding to that.

A senior Greek finance ministry official said Athens would welcome Chinese buyers of its bonds. The official declined to specify an amount, though a figure of €20 billion-€25 billion was raised in talks with Goldman Sachs. A €5 billion syndicated loan issue by Greece this week attracted bids worth more than €20 billion, but Greece continues to face pressure in financial markets. – (Copyright The Financial Times Limited 2010)