ATHENS - China could provide loans to Greece to fund government bond buybacks in the secondary market to help cut the country's debt burden, a Greek Finance Ministry official said on Friday.
"There are signs that China is interested in taking part in the new funding scheme for Greece," said the official, who declined to be named.
The official did not elaborate but referred to a meeting between Greek Finance Minister Evangelos Venizelos and China's International Monetary Fund (IMF) representative in Washington this week.
China has made a major investment in Greece's main port in Piraeus and offered to buy Greek government bonds when Athens resumes issuance, according to comments by Premier Wen Jiabao during a visit to Athens last year.
Wen said China had already bought Greek bonds previously.
The Chinese government is under pressure to invest the country's foreign reserves conservatively after it incurred losses on overseas financial investments during the global credit crisis.
Greece secured a second bailout at an emergency summit of leaders of the 17-nation eurozone last week, with 109 billion euros ($157 billion) of government money plus a contribution by private sector bondholders that may total as much as 50 billion euros by mid-2014.
In addition to the private sector's involvement, the summit decided to help Greece cut its debt mountain through a bond buyback program funded by the European Financial Stability Facility rescue mechanism.
On Thursday, Venizelos told lawmakers during a briefing of Parliament's economic and monetary affairs committee that, along with EU-IMF aid and private sector participation in a rescue package, a third nation could form another funding pillar for debt buybacks, without naming China.
"A third nation allows the formation of a third pylon that could fund the debt buyback mechanism in the secondary market," Venizelos told lawmakers.