China Uneasy About Proportion of Holdings in U.S. Treasuries

China Uneasy About Proportion of Holdings in U.S. Treasuries

www.washingtonpost.com

By Ariana Eunjung Cha
Washington Post Foreign Service
Friday, March 13, 2009; 11:17 AM

SHANGHAI, March 13 -- Chinese Premier Wen Jiabao said Friday that he is "worried" about the country's vast $1 trillion holdings in U.S. Treasuries and that China will pursue a policy of diversification when comes to its future foreign exchange holdings.

Wen's remarks, which were made at the close of the annual National People's Congress meeting in Beijing, echoed those that have been made by other high-ranking policymakers and bankers over the past year since the subprime crisis devastated the value of the mortgage-backed securities that made up a large chunk of China's U.S. holdings.

(visit the link for the full news article)

I say good for them now maybe our government will get serious about belt tightening.
This has gotten so out of hand it just makes me want to puke!
It goes on to say

"We have lent a huge amount of money to the U.S. Of course we are concerned about the safety of our assets. To be honest, I am definitely a little worried," Wen said.

At a number of diplomatic meetings since then, Chinese officials have raised the issue of U.S. Treasuries and have sought assurances the United States that it will do everything possible to maintain the stability of its economy. On Friday, Wen called on the Obama administration to "maintain its good credit, to honor its promises and to guarantee the safety of China's assets."

www.washingtonpost.com
(visit the link for the full news article)


[edit on 13-3-2009 by SLAYER69]

Well it seems that Hilary and Obama have their work cut out for them over the next 4 years and maybe this is some sort of strong arm tactics over the Korean missile issue and with all the half naked Chinese sailors threatening an illegal US naval mission off their coast recently.

If it is true that "China so owns the US" Then maybe we should not be pissing off the new boss aye?

Maybe another chess move in conjunction with the sabre rattling on the open seas?

Depending on the next move of the US , this could be a house of cards

[edit on 13-3-2009 by branty]

thanks Mod gods for moving this.
The breaking news was already posted people here.
www.abovetopsecret.com...

We can have a general discussion here though.

this thread truly deserves a bump, the implications of this could be huge, I dont know why people are not seeing it, maybe doom/gloom overload

Linky here
US seeks to reassure China over U.S. bond holdings

WASHINGTON, March 13 (Reuters) - The White House sought on Friday to reassure Chinese concerns about the safety of its vast holdings in U.S. government debt, saying there was no better place in the world to invest than the United States.

Chinese Premier Wen Jiabao said earlier on Friday Beijing expected to see results from U.S. President Barack Obama's economic recovery plan but expressed concern that massive U.S. deficit spending and near-zero interest rates would erode the value of China's huge bond holdings.

silly americans your war machine dares to provoke China and you expect mercy

Linky here

U.S. Treasury Responds to China’s Wen on Treasury Securities

By Rebecca Christie

March 13 (Bloomberg) -- The Obama administration is committed to returning the U.S. to a path of “fiscal sustainability,” Treasury spokeswoman Heather Wong said.

“The U.S. Treasury market remains the deepest and most liquid market in the world,” she said. “President Obama is committed to taking the steps necessary to restore growth and put this country on the path of fiscal sustainability, including cutting the long-term deficit in half over the next four years.”

The remarks were a response to comments earlier today by Chinese Premier Wen Jiabao, who said he is “worried” about his country’s holdings of U.S. government debt.

To contact the reporter on this story: Rebecca Christie in Washington at [email protected]

It’s a sad sign of America’s decline that if China wants to get into a currency fight the West will suffer more than East. This is because the U.S cannot issue more debt and get a useful value in return, without Eastern support.

But make no mistake both sides will suffer; many more factories will close in China if American (then follow on with usual other Western consumers) tighten up their belts still further. In fact I would put money on China suffering more politically than the U.S.

So China premier might not like having so many U.S “assets” (because they are worth less than was paid, and will probably be worth once again).
But then he doesn’t have much of a choice!!! If he starts selling in a hurry he would flood the market and deliver an even poorer deal for his nation than he otherwise would have.

Regardless of politics-military matters the U.S and China share the same economic boat. In fact I would say the U.S has been most considerate of China’s dictatorial needs just by buying so may goods from a country with less a 5th of the worlds population, yet more executions (never mind compulsory organ removals from political prisoners ect) www.hrw.org...
than the rest of the world put together.

reply to post by Liberal1984



My friend you make many valid points, but remember , you don't wanna get in a pissing contest with the Chinese , the Powers that be in China dont have to account to no one. They will , if needed swallow a bitter pill, it was only a short time ago that China consisted of majority small farms and farmers. Backing them into a wall will hurt the US wayyyy more ,

They have every right to be concerned. It's their money. Can you blame them for not wanting to be out billions and billions of dollars?

Hell...if I borrowed someone 20 dollars I'd be asking for it back before too long.

Now imagine loaning someone close to a trillion....

Just think people....you are working..to pay taxes to the Chinese...and the money that isn't taxed...is going to the Chinese as we buy much of their junk.

The Chinese own us financially.

We are in HUGE trouble. HUGE.

reply to post by Liberal1984


Interesting view although I to feel sad that it has to come to this.
Maybe and I'm still being optimistic here that this will be another case of major course correction for the US just like we needed back in the 80s with Japan where the US had to start doing business right, Now with China we will have to learn to be fiscally responsible.

China should not buy anymore US trash.

the whole us economy is just a larger version of Madoff fraud. the key of US fake economy is creating a larger new hole to fill the old hole. why should we helping them doing that? it's a shamless international fraud. way bigger than Madoff. the chinese people should decide whether use their money the help us government fraud. it's people's decison. not the government. and i'm pretty sure the answer is "no".

it's only a matter of time when dollar collapse. no matter we keep buying us trash debt or not. sooner getting out of this will be better.

[edit on 15-3-2009 by supercoolferrari]