"On whether China will reduce its foreign exchange reserves, how policymakers think, I don't know. I personally believe this possibility is very small," Zhang said on Sunday in Boao.However, in separate comments, central bank adviser Fan on Monday said China should make better use of its capital reserves by investing in real assets, rather than U.S. debt, reiterating a long-standing call from economists for China to diversify its holdings. "We are a low income country, but we are a high wealth country...we should make better use of the capital. Rather than investing in U.S. government debt, it's better to invest in some real assets," Fan said in Boao.China held around $1.17 trillion of Treasuries as of the end of January, making it the largest of America's foreign creditors and the No. 2 overall owner of U.S. government bonds after the Federal Reserve.A Chinese vice finance minister said last week that China is a responsible investor of its foreign exchange reserves and that it follows market rules in investing its reserves.

Source: The Star April 09, 2018 07:41 UTC