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BEIJING: China will not sell off its US dollar assets
as long as there is no major disagreement with the United States, a
researcher at a top government think tank said Thursday.
Zhang Ming, an economist with the
top Chinese Academy of Social Sciences, made the remark after US
President George W. Bush said China would be “foolhardy” to
attempt to push down the dollar in retaliation for US pressure over
Beijing’s alleged currency manipulation.
“As long as there are no big
upheavals in the American economy and there is no serious dispute
between China and the United States, the Chinese government will not
sell off US dollar assets in any major amounts,” Zhang told AFP.
He said that China would stand to
lose, too, if the dollar plunged as a result because an estimated
two thirds of its $1.3-trillion foreign exchange reserves are tied
up in US-dollar assets, mostly Treasury bonds.
“Neither China nor the United
States would rashly touch the yuan exchange rate,” Zhang said.
Bush earlier warned against any
attempt by China to hit back at Washington if US lawmakers pressed
for sanctions over the yuan when asked to comment on a report that
Beijing was considering such a move in Britain’s Daily Telegraph
newspaper.
“That would be foolhardy of
them to do that,” Bush said in an interview with Fox News, adding
he doubted the report was based on sources from the office of
Chinese President Hu Jintao.
“If that’s the . . . position
of the government, it would be foolhardy for them to do this.”
Faced with a massive and growing
trade deficit with China, US lawmakers are pushing for legislation
to allow for sanctions against Beijing over what is seen as its
manipulation of the yuan exchange rate to gain a trade advantage.
--AFP
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