BEIJING -- China is willing to continue investing in European Union government bonds on condition it can gain assurances that the risks are being controlled, Premier Wen Jiabao said Thursday.

China believes EU government and its people have the wisdom and capability in solving the debt crisis, Wen said, adding "we still have confidence of the EU economy, the eurozone and the euro."

Wen made the remarks while meeting the press after co-chairing the second round of Chinese-German intergovernmental consultations with the visiting Germany Chancellor Angela Merkel.

China will enhance communication and consultations with the EU, European Central Bank, relevant monetary funds and major countries to support the debt-ridden EU members to help them with their struggles, Wen noted.

China hopes EU can find a balance between fiscal austerity and economic stimulus, which is the fundamental way-out of the crisis.

Merkel's two-day visit is her second trip to China this year against the backdrop of the worsening EU debt woes and weakening China-EU trade.

Since the two leaders met in February, China has unveiled a range of aid plans including its contribution of $43 billion to the recapitalization of the International Monetary Fund and purchase of bonds of EU governments and the European Financial Stability Fund.

China's cooperation with Germany and EU should center on bolstering confidence. We should let people see the hopes, oppose protectionism and deepen collaboration to explore the market, Wen said.

The government should have confidence in the country, financial institutions in business, the enterprises in the market, and the consumers in the future prospects, he added.

Wen said China hopes the EU will achieve substantial results in implementing the rescue measures agreed at the EU summit, as it will help the international community to build up confidence.

Commenting on whether Greece will withdraw from the eurozone, and whether Spain and Italy will ask for new rescue plans, Wen said the key lies in their resolutions and effectiveness in pushing forward the reform, as well as Britain, France and Germany's willingness and timing to take action.

"Chancellor Merkel has told me EU's practice and that strengthens my confidence. But, to be frank, I do not think those measures will be carried out smoothly." Wen added.

The prolonged EU debt crisis showed signs of spreading, as Greece is waiting for a controversial plan of expenditure cuts, while Italy and Spain may need tens of billions of euros in additional aids with their banking system in peril.

Since the outbreak of the debt crisis, China has pledged to help the EU through its difficulties. The EU is China's largest trading partner, but with global economic outlook turning cloudy, bilateral trade between China and the EU fell 8.9 percent year-on-year to $48 billion in July. China's exports to the EU dwindled 16.6 percent to $29.37 billion.

On Thursday, China's ICBC Leasing and Airbus signed a procurement deal for 50 Airbus A320 planes, worth $3.5 billion.

During Merkel's visit, the two countries also signed more than 10 other cooperative documents, including an agreement about the Airbus plane being assembled in China, and other projects in aviation, automobile, communication, energy, environment, health to maritime cooperation.