1 Feb 2009

More purchases of US bonds will depend on risk - China

12:28 pm on 1 February 2009

China says future purchases of US Treasury bonds will depend on its need to protect the value of its foreign investments.

According to US data, China is the single biggest foreign investor in US Treasury bonds, with $US681.9 billion in holdings as of November.

Premier Wen Jiabao said on Saturday that China's foreign reserves have been growing very fast and China was trying to bring more diversification to its holdings of foreign exchange. Buying US Treasury bonds was a major part of that, he said.

He said keeping China's currency at a steady level was good for the global economy:

"In the financial crisis, it is all the more important to maintain the stability of the yuan exchange rate in a reasonable and balanced level, this is not only in the interests of the China but also in the interest of the world economy," he said.