China should refrain from buying European government bonds and cut dollar holdings in its foreign exchange reserves, Yu Yongding, a former adviser to China's central bank, said on Wednesday.
 |
"We should not buy European bonds and there should be conditions for us to buy," Yu, an influential economist in the Chinese Academy of Social Sciences, said a lecture at the top government think-tank.
Yu did not elaborate on the conditions. With about a quarter of its $3.2 trillion foreign exchange reserves in euro, China has repeatedly voiced confidence in the euro zone, but Beijing has been reluctant to reveal, or even to confirm, concrete steps it would take to support Europe.
Yu's view may not present that of policymakers.
Chinese leaders have pledged their support for Europe, although Premier Wen Jiabao pushed for the troubled European Union to recognize it as a market economy.
Yu said China should cut its dollar-denominated assets in its reserves, the world's largest, because the dollar is set to weaken in the long run.
He added that the dollar may strengthen in short-term as a safe haven in a volatile market.
"We should reduce our holding of dollar-denominated assets in foreign exchange reserves," he said. "We have too much of such assets."
Yu repeated his calls for China to cut dollar holdings, arguing that it's unwise for the country to accumulate foreign exchange reserves and invest in U.S. Treasuries to get lower returns compared to that enjoyed by foreign investors in China.
CNBC
hostgator coupon 2011
No comments:
Post a Comment