Chinese Premier Worried About Investments in U.S.
Friday, March 13, 2009
BEIJING, March 13 -- China's premier said Friday he is worried about the safety of his country's enormous holdings of U.S. Treasurys and other debt and called on Washington to maintain a credible economic policy.
Premier Wen Jiabao noted that China is now the largest foreign creditor to the United States and as such wants to make sure that U.S. policies dealing with the financial crisis do not damage the value of Chinese holdings.
Analysts estimate that nearly half of China's $2 trillion in currency reserves are invested in U.S. Treasurys and notes issued by other government-affiliated agencies.
"We have made a huge amount of loans to the United States. Of course we are concerned about the safety of our assets," Wen said during a nationally televised news conference at the end of China's annual legislative session. "To be honest, I'm a little bit worried."
Last month, during her visit to China, Secretary of State Hillary Rodham Clinton sought to reassure Beijing that its massive holdings of U.S. Treasurys and other debt would remain a reliable investment.
During his remarks, Wen also said that China is prepared to introduce new stimulus measures if needed to tackle more difficult economic conditions.
The government has "adequate ammunition" and has formulated plans for more difficult conditions, he said.
Wen gave no details of Beijing's possible new plans and did not say under what conditions it might expand its $586 billion stimulus plan announced in November.
On the sensitive subject of currency, Wen said that China would pursue a policy of "diversification" when it comes to its foreign exchange holdings. "We have to take into account the overall international financial stability."