China 'concerned' about US Treasury holdings

Original source:

Chinese Premier Wen Jiabao warned the US on Friday to protect China's massive loans to the US Treasury.

Mr Wen noted that Beijing is the biggest foreign creditor to the US and called on Washington to see that its response to the global slowdown does not devalue Chinese holdings.

'We have made a huge number of loans to the United States. Of course we are concerned about the safety of our assets.

'To be honest, I'm a little bit worried,' Mr Wen said at a news conference after the closing of China's annual legislative session.

'I would like to call on the United States to honour its word, remain a credible nation and ensure the safety of Chinese assets.'

Analysts estimate that nearly half of China's $2 trillion (£1.43 trillion) in currency reserves are in US Treasury bonds and notes issued by other government-affiliated agencies.

Mr Wen's comments foreshadowed possible appeals to President Barack Obama, who will meet Chinese President Hu Jintao at the G20 summit in London on April 2.

Washington is counting on China to continue buying US bonds to fund its massive stimulus package.

Last month, visiting Secretary of State Hillary Clinton sought to reassure Beijing that government debt would remain a reliable investment.

Mr Wen added that he was confident that China could emerge from its current slump 'at an early date.'

He said that the government was ready to expand its 4 trillion yuan (£420 billion) financial stimulus plan to boost growth in the world's third-largest economy, prompting a rally on world stock markets.