China defends move cutting U.S. Treasury securities holdings

07:37, February 26, 2010      

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China defended its move to reduce its holdings of U.S. Treasury securities, saying the United States should take steps to promote confidence in U.S. dollar .

Foreign Ministry spokesman Qin Gang made the comment Thursday when responding to questions on China's sale of U.S. Treasury securities last December.

Qin said the issue should be viewed from two perspectives.

He said on the one hand, China always followed the principle of "ensuring safety, liquidity and good value" in managing its foreign exchange reserve. And when it came to how much and when China buys the bonds, the decision should be made taking into account the market and China's need, so as to realize rational deployment of China's foreign exchange property, he said.

And on the other hand, the United States should take concrete steps to beef up the international market's confidence in the U.S. dollar, Qin said.

The way to view the issue was similar to doing business, he said.

China trimmed its holdings of U.S. debt by 34.2 billion U.S. dollars in December 2009, leaving Japan the largest holder of U.S. Treasury securities, the U.S. Treasury Department reported on Feb. 16.

As of the end of November last year, China held 789.6 billion U.S. dollars of U.S. Treasury bonds.

Source: Xinhua
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