Beijing affirms support for US dollar holdings

Beijing reiterated its commitment to US dollar holdings on August 12, when the official Xinhua News Agency carried an interview with an unnamed central bank official, AP reported. The official said that US dollars and government bonds are "an important part of China's foreign reserve investments." The restating of support for US dollar assets is designed to reduce speculation that it will dump its dollar holdings in a trade war with the US. This view surfaced recently when government economists were quoted suggesting the idea in an article in the UK's Daily Telegraph. China has the world's largest foreign exchange reserves, composed mainly of its US dollar assets worth US$1.3 trillion.