China says it hopes EU will stick to bailout plan

China said Wednesday it hopes Europe will stick to a bailout plan reached at last week's debt crisis summit, after Greece called a surprise national referendum on the deal.

World markets have plunged after the shock announcement that Athens will hold a vote on the package of measures agreed last week to try to rescue the eurozone from a worsening debt crisis.

Foreign ministry spokesman Hong Lei said China had "taken note" of the Greek referendum announcement, adding that "we hope the European side can honestly implement the relevant plan to solve the crisis."

The official Xinhua news agency went a step further, calling on EU leaders to persuade Greece to "drop the referendum idea" or help them find a "better solution to their political embarrassment".

It also said "urgent efforts must be taken to prevent the rescue plan from being aborted".

EU leaders last week hammered out a deal that would see Greece's bondholders take a 50 percent loss on their investments, banks recapitalised and a regional bailout fund boosted.

However, there are fears the plan could now be in tatters with analysts expecting Greeks, already fed up with public-spending cuts, to reject it.

China, the world's second-largest economy and a major holder of European debt, has repeatedly called on EU leaders to put their financial houses in order.

On Wednesday, Hong reiterated Beijing's support and said he hoped Europe's actions would be "conducive to the stability of the markets".

"China is ready to explore ways to fight against the (debt) crisis with the EU," he said. "China has been and will continue to be a major investor in the EU market."

The head of Europe's bail-out fund, Klaus Regling, travelled to Beijing last Friday for talks about a possible contribution, but China has so far made no firm commitment to provide financial assistance for the troubled eurozone.

China's $3.2 trillion dollars in foreign exchange reserves have put it in a position of strength, but it also faces huge domestic challenges.

They include stubbornly high inflation, an economy that is excessively dependent on exports, and 150 million people -- almost half the eurozone population -- still living in poverty.

Greek premier George Papandreou's announcement of a confidence vote and then a referendum on the debt deal wrongfooted EU leaders who had laboured to put the rescue package together last week.

German Chancellor Angela Merkel and French President Nicolas Sarkozy have summoned Papandreou to a meeting Wednesday, the eve of the opening of the G20 summit in Cannes, France, that is expected to be dominated by the crisis.