| Zhang Bin: The Principal of China's US Dollar Investment Under Threat Controling the appreciation of the RMB brings benefits to the US economy, but it brings disadvantages to the Chinese economy at the same time, says Zhang Bin, deputy director of the International Finance Research Center, Institute of World Economics and Politics at the Chinese Academy of Social Sciences. Zhang says China should cut its holdings of US bonds on the basis of reducing foreign exchange surplus. Whether it is in terms of purchasing power or financing, the investment yield of China’s foreign exchange reserves is not optimistic. Since the sub-prime loan crisis developed in the US, the principal of China’s US dollar investment has been under threat. “Some impacts are yet to be felt on China’s financial market and in its export industries, so the weakening US economy will continue to affect the local economy.” |
