Once again the topic of the “dollar” is on the table. Chinese economists deem holding of US bonds “risky”:
Xinhuanet.com: BEIJING, May 31 (Xinhua) — On the first day of U.S. treasury secretary Timothy Geithner’s visit to China, the Beijing-based Global Times published a survey of 23 famous Chinese economists on Sunday, saying that the majority of them deemed the vast holding of U.S. bonds “risky.”
Among the 23 experts polled, 17 said they believed that U.S. equities pose great risks to China’s economy.
Geithner will begin his first visit to Beijing as US treasury secretary in an attempt to assure the U.S.’ biggest creditor that its large holding of purchased US bonds is safe.
The visit also highlights Geithner’s comments made earlier this year alleging that China has manipulated its currency.
Li Wei, an expert with the Institute of Ministry of Commerce, and Tian Yun, a scholar at the China Macro Economics Institute, expressed concerns over the risks, saying that the United States may export its deepening crisis to China “by printing U.S. dollar notes uncontrollably.”
But five other experts, including Yi Xianrong, a researcher at the financial research center of the Chinese Academy of Social Sciences (CASS), and Mei Jun, deputy director of the Finance and Securities Institute at Renmin University of China, said they don’t believe U.S. equities pose “great risks” to the country’s economy.
One thing is for sure, if China gets rid of its US bonds, the dollar will begin a downward spiral…
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