温家宝---钱多也是烦恼：China: Under Pressure Over Foreign Currency Reserves

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如果钱多也是烦恼，欧愿辉常烦恼！ =_=

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DJ UPDATE: China: Under Pressure Over Foreign Currency Reserves


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SINGAPORE (AP)--China is under pressure to manage its large foreign reserves, even though the cache of $1.43 trillion is a sign of the country's success, the Chinese premier said Monday.

"I have told foreigners before that when our foreign reserves were small we weren't under so much pressure," Premier Wen Jiabao said in a speech during a visit to Singapore.

"With regard to our foreign currency reserves, how to manage the account" is a problem for the government, he said.

Wen's comments assume significance because Chinese officials rarely talk publicly about the currency or foreign exchange reserves which reached $1.43 trillion as of the end of September, according to the official Xinhua News Agency. It said that was a 45% increase over the same period last year.

As premier, Wen is China's chief economic official. Although he is No. 3 in the hierarchy, he is the highest-ranking official who talks publicly about financial policy.

The large reserves are "a problem but it is also a good thing," Wen said, using the figures to say that China's policy of opening up to the world has been a great success.

"Only an open and inclusive nation can become strong and prosperous," he said.

Financial markets have, however, worried that Beijing will shift money out of U.S. dollar assets because the weakening dollar is causing their value to drop against those in other currencies.

China does not release details of the composition of its reserves, but outside estimates are that 60%-70% are in U.S. Treasury securities and other U.S. dollar-denominated instruments, with the rest in euros and a small portion in yen.

However, a problem for Beijing will be that only the dollar has a big enough pool of bonds and other financial instruments to absorb China's reserves.

The government has converted $200 billion from the reserves for use by its investment agency. But that still leaves more than $1 trillion that it needs to park in Treasurys or other safe investments.



(END) Dow Jones Newswires

November 19, 2007 04:53 ET (09:53 GMT)

Copyright (c) 2007 Dow Jones & Company, Inc.