SAFE: China has no subprime holdings

None of China's huge foreign exchange reserves was invested in the trouble-hit US subprime mortgage market, according to the State Administration of Foreign Exchange. Wei Benhua, who serves as deputy head of the administration, said that China had no subprime securities holdings, Reuters reported. This confirms earlier statements from Beijing that, despite the fact that most of the country's US$1.33 trillion in foreign currency is invested in US bonds, it had limited exposure to the low-end mortgage crisis that has pushed the rest of the world into a credit crunch. Analysts believe that China's capital controls have helped insulate it from the problems. Bank of China, Industrial and Commercial Bank of China and China Construction Bank reported subprime mortgage-backed investments of US$8.97 billion, US$1.22 billion and US$1.06 billion respectively.