A student audience in Beijing burst into laughter when U.S. Treasury Secretary Timothy Geithner said the Chinese government's investments in U.S. dollar-denominated assets are safe. "Chinese assets are very safe," Geithner said. "We believe in a strong dollar ... and we're going to make sure that we repair and reform the financial system so that we sustain confidence.

http://www.smartbrief.com/news/cfa/storyDetails.jsp?issueid=F827E24D-51D4-4053-A76D-7FA9790BED5C&copyid=F851FC06-B2B1-4214-9E12-0C7E44A06C6D

The Chinese always know the Americans are all about talk and no action when it comes to economics.

This is exactly the reason why Wen is so publicly upset, and had asked Obama repeatedly about the safety of Chinese investments in US treasuries. Somewhere along the line, the PRC government got suckered into the idea that investing in US notes were the safest thing in the world. Now, more than half (some even suspect close to 80%) of China's foreign currency reserves are tied up in US securities. The Chinese man on the street may laugh, but the PRC government is hardly finding this to be amusing at all.

China has over 2 trillion foreign reserves, with around 700 billion in US bonds and securities.


Whoever said winning isn't everything must be a loser...

most of the reserves is also in US dollar (not US-dollar denominated securities) so at risk if US dollar devalues.

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"China has over 2 trillion foreign reserves, with around 700 billion in US bonds and securities."

You are wrong.

http://www.eeo.com.cn/ens/finance_investment/2009/03/26/133494.shtml

"..A source familiar with the report told EO that up to 1.2 trillion US dollars of the reserves had already been invested in US Treasury and corporate bonds..."

And here's another good article on why China needs to keep the Dollar strong. It's not out of love for the US, but rather it's needs to protect its investments:

http://www.chinadaily.com.cn/opinion/2009-05/20/content_7794338.htm

Let me rephrase that, China has over 2 trillion in foreign reserves, around 700 Billion USD in US GOVERNMENT BACKED SECURITIES.

Foreign owners of US Treasury Securities (January 2009)
Nation billions of dollars percentage
People's Republic of China 739.6 24.07%
Japan 634.8 20.66%
Oil exporters 186.3 6.06%
Caribbean banking centers 176.6 5.75%
Brazil 133.5 4.35%
United Kingdom 124.2 4.04%
Russia 119.6 3.89%
Luxembourg 87.2 2.84%
Taiwan 73.3 2.39%
Hong Kong 71.7 2.33%
Switzerland 62.1 2.02%
Germany 56.4 1.84%
Republic of Ireland 50 1.63%
Singapore 38.3 1.25%
Thailand 37.2 1.21%
Mexico 34.9 1.14%
India 32.5 1.06%
Turkey 31.3 1.02%
Korea 31.3 1.02%
Norway 21.9 0.71%
France 17.9 0.58%
Israel 16.9 0.55%
Egypt 16.9 0.55%
Netherlands 16.8 0.55%
Italy 15.6 0.51%
Belgium 15.5 0.50%
Chile 15.2 0.49%
Sweden 12.4 0.40%
Philippines 11.6 0.38%
Colombia 11.3 0.37%
All other 179.4 5.84%
Grand Total 3072.2


Whoever said winning isn't everything must be a loser...