Obama must take action to ensure Chinese assests are secure in the United States, says a March 19 editorial in the International Herald Leader, a subsidiary of Xinhua. On March 13, Premier Wen re-iterated China’s request that the U.S. administration honor its promise to ensure Chinese assets are secure in the United States. In response, Obama announced that investors from the world including China should have absolute confidence in their investment in the United States.
The editorial comments that unless Obama takes concrete action to reassure China, his promise is nothing but lip service. Specifically, China should leverage its position as the largest debtor and negotiate a much higher return with the U.S. Treasury for U.S. government bonds. China should tie the appreciation of the RMB with the purchase of U.S. government bonds to resist further pressure from the U.S. on RMB appreciation.
Source: Xinhua, March 19, 2009