China Says Foreign Reserves Not Political 'Weapon'

China Says Foreign Reserves Not Political 'Weapon'

www.ajc.com

In a question-and-answer format, the statement asked, "Are China's foreign reserves a 'secret weapon' or a 'nuclear weapon'?" The reply said China is a responsible long-term investor and "doesn't seek the power to control recipients of its investment."

The statement said the U.S. bond market is an important part of China's reserves. It said Beijing will adjust its holdings according to market performance and said they "should not be politicized."

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Well, if this is true, it sure is good news!

Echoing earlier appeals by Chinese leaders, it called on Washington and other governments to follow prudent economic policies to protect the value of Beijing's investments.
******SKIP******
In an earlier statement, the foreign exchange manager said Tuesday it made a "relatively good profit" in 2008 and 2009 despite the global crisis. It expressed confidence it will make "long-term stable and good results" in the future.

I guess as long as the dollar doesn't completely collapse, China is still, shall we say, "happy", with their investment.

I think China realizes that if they try to cash in their bonds it would cause economic damage to the US, and being a huge trade partner with the US, would also hurt China's economy.

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

"Echoing earlier appeals by Chinese leaders, it called on Washington and other governments to follow prudent economic policies to protect the value of Beijing's investments."

I wonder what this really means. Sounds a bit like they're in control but also like there might be a hidden meaning here. Wonder if it has any bearing on what's going on in the Middle East.

$2.5 trillion. Wow. Thought that was a "myth."

Yeah, I guess it's up to $2.5 trillion now, ...

China says foreign reserves not political 'weapon'

China tried Wednesday to allay concern about the political impact of its $2.5 trillion foreign reserves, saying they are not a "nuclear weapon" to control other nations and its vast holdings of U.S. Treasury debt "should not be politicized."

I don't think they'll call these bonds in (using them as a weapon) to try to hurt another countries economy mainly because in doing so would also decrease the value of the currency of that country and therefore hurt China's investment.

[edit on 7/7/2010 by Keyhole]

Well its like this.

If we go to war with Iran and cut off their exports to Asia then we will increase China's energy bill. If we hurt China economically then only way they can recoup the money that the U.S. directly caused them to lose is by cashing in their reserves of foreign debt. Our foreign debt. They use as that use as leverage and insurance against us.

It is pretty obvious that they have us by the balls in that if we do anything to greatly affect their foreign policies or economic/resource strategies that we will end up paying more for the damage we would have caused. So, they are lying. China's reserves are a tool used against the U.S. in the form of leverage and insurance meant to keep us at bay, get us listen to their demands, and it keeps their economy stable.

[edit on 7-7-2010 by tooo many pills]