Why is China buying more U.S. debt?

BEIJING, China (CNN) -- China, holder of nearly $1 trillion in U.S. debt, will keep buying Treasuries, but will keep a close eye on their value just the same, a Chinese government official said.

"Investing in U.S. Treasury bonds is an important component of China's foreign currency reserve investments," said Hu Xiaolian, deputy governor of the People's Bank of China. "We are naturally relatively concerned with the safety and profitability of U.S. government bonds."

Hu's comments came at a briefing Monday ahead of the Group of 20 financial summit in Britain scheduled for early next month. The G-20 nations represent 85 percent of the world's gross domestic product.

China has an estimated $2 trillion in foreign reserves and is the United States' largest creditor, having bought more than $1 trillion of its debt.

Chinese Premier Wen Jiabao expressed similar concerns about the state of the U.S. economy and President Barack Obama's economic plan earlier this month.

"We have loaned a huge amount of money to the United States," Wen said at a news conference in Beijing on March 13. "Of course, we are concerned about the safety of our assets. To be honest, I'm a little bit worried. I would like for you [a western reporter] to call on the United States to honor its word and stay a credible nation and ensure the safety of Chinese assets."

Washington is spending trillions of dollars in an attempt to shore up the the U.S. economy, including a stimulus package, bailouts of top U.S. industries and the purchase of billions of dollars in bad bank assets.
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The programs could undermine the dollar, making China's investments less valuable. But a stronger U.S. economy could override those

Category:

News & Politics

Tags:

• china
• united
• states
• us
• money
• debt
• economy
• finance
• communist
• beijing
• washington
• treasury

[MimicThatThing]

So we're basically china's bitch.

[KevitoKeviiBeats]

@crazysillybaby1 u guys make and manufacture your owns goods and start exporting and stop borrowing money u guys dont even have.

[piecharthosen]

at least rice has value. I still don't understand how gold backed currency works - I mean gold has value because it's used to do things, is that the only reason?

[mropinionful]

@piecharthosen true. very true. thats the press for ya.

[piecharthosen]

the video isn't inaccurate per se - it just doesn't go one step further.

[Fridaey13txhOktober]

Because they haven´t grasped that the whole thing is a scam.

The debt will only be repaid with Swine flu or some other "natural" biological attacks on China, should the US economy crash for good.

[Romantic6688]

china actually provides everybody with goods, whereas US only knows to exploit everybody. thank you

[D4GG312]

@DigressBeats SHES really KOREAN..

[mropinionful]

@DigressBeats Look another idion... master race baiter. GROW SOME SKIN AN QUIT WHINING ABOUT RACISM.

[mropinionful]

@crazysillybaby1 Ron Paul won't win. No chance. As for this video, it is inaccurate in the conclusion that china only wants to keep their greatest customer. In actuallity they will soon have a large enough population that they will not need to sell their goods to anyone but chinese, however thet will need energy. After we default they will demand compensation in oil, natural gas, coal, and foodstuffs. they will suck this country dry without a second thought.

[408Magenta]

@crazysillybaby1 Keep in mind what happened to the three presidents who tried to end the FED. The latest one was Jack Kennedy.