|"Only dull people are brilliant at breakfast"
|"The liberal soul shall be made fat, and he that watereth, shall be watered also himself."
-- Proverbs 11:25
China, the world’s biggest holder of United States government debt, on Friday expressed concern about the safety of those assets as American deficits have ballooned with costly stimulus and bailout packages aimed at rescuing the economy..
The Chinese prime minister, Wen Jiabao, said he was “worried” about its holdings of U.S. Treasuries and called on the United States to provide assurances that the investment was safe. His remarks came at a news conference in Beijing after the final session of the National People’s Congress, the Chinese legislature.
China has the world’s largest reserves of foreign exchange thanks to years of double-digit growth in the years that preceded the financial crisis that began in the United States in 2007. Beijing has been deploying much of its reserves in increased purchases of U.S. Treasuries and the financing of major investment projects designed to prop up flagging growth at home.
Analysts estimate that nearly half of China’s $2 trillion in currency reserves are invested in U.S. Treasuries and notes issued by other government-affiliated agencies.
Those Chinese investments have helped assure the stability of the U.S. Treasury market despite the economic convulsions of the last year, and some economists have warned of alarming consequences should the Chinese investments stop propping up the market for American public-sector debt.
During her visit to China last month, Secretary of State Hillary Rodham Clinton sought to reassure Beijing that those holdings remained a reliable investment.
Mr. Wen sought added reassurances on that front on Friday, calling on the United States to “maintain its good credit, to honor its promises and to guarantee the safety of China’s assets.”
Labels: economic death watch