Fed chairman backs China

New US Federal Reserve chairman Ben Bernanke said China should take more steps to make its currency flexible, but played down fears that the country's US dollar assets endangered the US economy, the Financial Times reported. Presenting the US central bank's semi-annual economic outlook to US senators, Bernanke said the US had to work with China as it moved towards a more flexible currency rate rather than giving up gains made in opening up world trade. "It's not a good idea to break down some of the gains we've made in terms of free and open trade in the world economy…we should be very careful about that," he said. He also scotched concerns that a shift away from dollar denominated assets by China's central bank would harm US asset prices, adding that he was not aware of any changes in plans to hold the assets.