Xinhua’s comments came as China’s central bank said it would continue to diversify its foreign currency investments, signalling growing concerns in Beijing over the US debt crisis and economic downturn.
“China’s foreign exchange reserves will continue following the principle of diversified investment, enhancing risk management,” People’s Bank of China governor Zhou Xiaochuan said in a statement.
“Large fluctuations and uncertainty in the US Treasury bond market will affect the stability of international monetary and financial systems, which will hurt global economic recovery.”
The statement, in which he also welcomed the plan, was the first official response to the deal to raise the limit on US borrowing and enact at least $US2.1 trillion in spending cuts over the next decade.
“We will further study and pay close attention to the details of the plan in hopes the US government and Congress adopts responsible policy measures to properly deal with the debt problem,” he added.
Shayne Heffernan
Shayne Heffernan oversees the management of funds for institutions and high net worth individuals.