BEIJING, May 31 (Xinhua) -- On the first day of U.S.
treasury secretary Timothy Geithner's visit to China, the Beijing-based Global
Times published a survey of 23 famous Chinese economists on Sunday, saying that
the majority of them deemed the vast holding of U.S. bonds "risky."
Among the 23 experts polled, 17 said they believed
that U.S. equities pose great risks to China's economy.
Geithner will begin his first visit to Beijing as US
treasury secretary in an attempt to assure the U.S.' biggest creditor that its
large holding of purchased US bonds is safe.
The visit also highlights Geithner's comments made
earlier this year alleging that China has manipulated its currency.
Li Wei, an expert with the Institute of Ministry of
Commerce, and Tian Yun, a scholar at the China Macro Economics Institute,
expressed concerns over the risks, saying that the United States may export its
deepening crisis to China "by printing U.S. dollar notes uncontrollably."
But five other experts, including Yi Xianrong, a
researcher at the financial research center of the Chinese Academy of Social
Sciences (CASS), and Mei Jun, deputy director of the Finance and Securities
Institute at Renmin University of China, said they don't believe U.S. equities
pose "great risks" to the country's economy.
They said compared with other investment, the
investment in U.S. notes are less risky as the U.S. is still the engine of the
Hu Zhihao, a scholar of the Finance Institute of
CASS, said the way China holds U.S. equities poses the risk as almost all the
foreign reserves are in the hands of the government, which cannot be sustained
and will have to change gradually.
Knowing the potential risks, 15 of the interviewed
economists said they were against the idea to quickly offload China's possession
of U.S. debt as a means to strengthen the country's financial stability and
decrease Beijing's vulnerability to the already ailing world economy.
Song Fengming, director of the Department of Finance
in the School of Economics and Management at Tsinghua University, said China has
no better option but to buy U.S. Treasury bonds, while other options, such as
the Japanese Yen and British pound, are volatile and soft.
Other experts held China should offload the U.S.
Zhou Shijian, senior research fellow of the Center
for U.S.-China Relations at Tsinghua University, said the vast holding of U.S.
equities can be very dangerous as the Americans are not going "to reduce the
speed of printing dollars."
On finding a way out, most experts said China ought
to expand its investment on tangible and strategic materials such as grain,
energy and mineral resources, and intangible assets such as equities and bonds.
They also believed that Chinese enterprises should
conduct overseas mergers and acquisitions, while increasing exports of high
Li Defeng, a professor of the School of Finance at
the Central University of Finance and Economics, said China should reform its
existing economic growth pattern and rely on expanding domestic demand.
He Weiwen, a director of the American Economic
Association of China, said China's neighboring countries, especially in East
Asia, can serve as its new investment destination.
Go easy on overseas assets
BEIJING, May 30 -- Many multinationals have seen
their market value plummet since the global financial crisis broke out.
Discussions over whether China should start buying up overseas assets at much
cheaper rates through mergers and acquisitions (M&As) are becoming heated.
But an article in www.china.com calls for discretion over such plans. Excerpts:
The call for Chinese enterprises to purchase "cheap"
overseas assets started in 2007, when the US subprime mortgage crisis emerged,
and became stronger after the global financial crisis broke out last year.