Worries about safety of Chinese assets in US
Chinese Premier Wen Jiabao said Friday he is "a little bit worried" about the safety of Chinese assets in the United States, urging the U.S. government to ensure the security of those assets.
"We lent such huge fund to the United States and of course we're concerned about the security of our assets and, to speak truthfully, I am a little bit worried," said Wen at a press conference after the close of the annual parliament session.
He urged the U.S. government to keep to its commitment and ensure the safety of the Chinese assets in the United States.
China has invested its huge foreign exchange reserves in low-risk but low-yield assets, such as U.S. government bonds, to play it safe.
"China is indeed the largest creditor of the United States, which is the world's biggest economy. We are extremely interested in developments in the U.S. economy," said Wen, adding that he is expecting the effect of the measures taken by the U.S. administration of President Barack Obama to counter the international financial crisis.
Wen reiterated China's principle of guaranteeing the "safety, liquidity and good value" of its foreign exchange reserves and diversifying the investment of the reserves.
"On the foreign reserves issue, the first consideration is our national interest," said Wen. "But we also have to consider the stability of the overall international financial system, as the two factors are interlinked."
"Currently, our reserves are generally safe," he said.
Meanwhile, Wen said the country's foreign reserves will be mainly used in overseas investment and trade, as the reserves are actually the liabilities of the central bank instead of fiscal fund.
He said in its bid to explore both domestic and overseas markets and utilize resources in both markets, China will seek make a better use of its reserves for the purpose of supporting domestic undertakings and improving people's living standards.
China's foreign exchange reserves hit a record 1.95 trillion U.S. dollars at the end of 2008, the largest in the world and far exceeding that of Japan, the second-largest foreign exchange holder with 1.03 trillion U.S. dollars.
According to the U.S. Treasury, China held 681.9 billion U.S. dollars worth of U.S. government bonds as of November.
