Dai Xianglong, the chairman of the National Social Security Fund, said that China has no choice but to keep buying US Treasuries, the South China Morning Post reported, citing state media. “It’s a necessary choice for China to buy US Treasuries when you weigh up the pros and cons,” Dai, a former central bank governor, told a forum in Tianjin. However, Dai also said China should diversify its foreign exchange reserves. Several senior officials have continued to voice concern in recent weeks about Beijing’s exposure to US debt, given what they regard as mounting medium-term risk of inflation in the United States. Dollar assets comprise roughly 70% of China’s US$1.95 trillion in official foreign exchange reserves.
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