“This is a purely market-driven investment behavior. I would hope not to see this matter politicized,” the chief foreign exchange regulator, Yi Gang, said at a news conference. He was responding to a question about concerns among some American lawmakers that Beijing’s holdings of US debt pose a political threat to the United States. “China is a responsible investor and we fully believe such investments can be mutually beneficial,” Yi said.
China’s $2.4 trillion in foreign reserves are the world’s largest and their management is closely watched by financial markets, especially as governments raise money for stimulus and struggling companies look for investment. China is the biggest foreign owner of US government debt and some American commentators have suggested it might abruptly sell Treasury securities to express anger over Tibet, Taiwan or other strains. Beijing has never publicly threatened such a move, which would be expensive and could hurt China by causing problems in a key export market.
