China's SAFE takes advantage of high prices, sells Bunds

The State Administration of Foreign Exchange, the People's Bank of China's arm in charge managing the country's vast international reserves, started selling German government debt in March, making it easier for European officials to implement quantitative easing.

The report from the Financial Times came amid speculation the European Central Bank might ramp up its asset purchases when the Governing Council meets in December.

Analysts had long worried about the ECB´s ability to find enough German debt to fulfill its mandate of purchasing €60bn a month in government liabilities, €10bn of which had to be so-called Bunds.

Low levels of debt issuance only served to compound the ECB´s difficulties.

Germany´s monetary authority had searched globally for possible sellers, including SAFE, according to one person familiar with the matter, the Financial Times reported.

Chinese officials were all too happy to take advantage of those high prices.

SAFE, which it was thought help hundreds of billions of dollars in European government debt, could also help should the ECB need to bolster its debt purchases in response to excessive weakness in emerging markets, the report said.