China, whose $2.45 trillion in foreign-exchange reserves are the worldÃ¢â‚¬â„¢s largest, is turning bullish on Europe and Japan at the expense of the U.S.
The nation has been buying Ã¢â‚¬Å“quite a lotÃ¢â‚¬Â of European bonds, said Yu Yongding, a former adviser to the PeopleÃ¢â‚¬â„¢s Bank of China who was part of a foreign-policy advisory committee that visited France, Spain and Germany from June 20 to July 2. JapanÃ¢â‚¬â„¢s Ministry of Finance said Aug. 9 that China bought 1.73 trillion yen ($20.1 billion) more Japanese debt than it sold in the first half of 2010, the fastest pace of purchases in at least five years.
Ã¢â‚¬Å“Diversification should be a basic principle,Ã¢â‚¬Â Yu said in an interview, adding a Ã¢â‚¬Å“top-level Chinese central bankerÃ¢â‚¬Â told him to convey to European policy makers ChinaÃ¢â‚¬â„¢s confidence in the regionÃ¢â‚¬â„¢s economy and currency. Ã¢â‚¬Å“We didnÃ¢â‚¬â„¢t sell any European bonds or assets, instead we bought quite a lot.Ã¢â‚¬Â
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