BEIJING — China sought Tuesday to allay concerns about a reduction in its massive investment in US Treasuries, saying it was a responsible investor and any changes were part of normal market operations.
"China has substantial foreign exchange reserves and ... the US T-bond market is very important to us," the head of the State Administration of Foreign Exchange, Yi Gang, told reporters.
"It is normal for us to have operations with regard to our holdings of T-bonds," Yi said on the sidelines of the annual session of the National People's Congress, China's rubber-stamp parliament.
The US Treasury Department released revised data last month showing China had cut back but remained the top holder of US debt at the end of December, after earlier indications it had been eclipsed by Japan.
China held 894.8 billion dollars in Treasury securities at the end of 2009 compared with a revised 929.0 billion dollars in November, fuelling concerns in Washington about Beijing's motives.
Some US lawmakers have warned that China's investment in bonds is becoming a political as well as an economic risk.
China has warned of retaliation against the United States after President Barack Obama defied Beijing by approving an arms package to rival Taiwan and meeting Tibet's exiled spiritual leader the Dalai Lama.
But other analysts have said any serious move away from US Treasuries by China would trigger a fall in bond prices, ultimately hurting Beijing.
Yi told reporters that changes in China's Treasury holdings were "purely market investment behaviour" and he hoped it would not be "politicised".
"China is a responsible investor and we fully believe such investment can be mutually beneficial," he said.
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