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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.
"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."
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.
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 firstname.lastname@example.org