BEIJING (MNI) – People’s Bank of China Governor Zhou Xiaochuan
welcomed the end of the deadlock in Washington in recent days over the
raising of the debt ceiling but continued to urge the U.S government to
ensure the safety of Treasury investments and warned that China will
continue to diversify its foreign exchange holdings.
“We have noticed that the U.S House and Senate have passed bills to
control spending, making progress on raising the debt ceiling and
cutting the deficit in long term. We welcome this,” Zhou said in a
statement on the website.
Zhou said the U.S. Treasury bond is the major investment and
trading product in the global bond markets and sharp volatility and
uncertainty within U.S. bond markets would hurt the stability of the
world financial system and the global economic recovery.
“We hope the U.S. government and Congress take concrete and
responsible policy measures to properly handle the debt problem, ensure
the safety of U.S. Treasury investments… and boost global investor
confidence,” Zhou said.
He also repeated a long-standing government policy that China
continue to diversify its $3.2 trillion in foreign exchange reserves,
and enhance risk management to reduce any negative impact on China from
turmoil in the global financial markets.
Hours before Zhou’s statement, Moody’s Investors Service reiterated
the U.S. government’s AAA rating but with a negative outlook.
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