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Use Buying U.S. Bonds as a Political Chip

The Chinese state owned newspaper People’s Daily recently published an article discussing the way China purchases U.S. bonds. The article suggested that although Yi Gang, Deputy Managing Director of People’s Bank of China and Chairman of State Administration of Foreign Exchange, claimed the bond purchase was purely a market investment behavior, yet it is impossible to completely de-link economic and political considerations. That President Obama’s recent protectionism is serving some political interest is proof. Some U.S. bankers now see China’s holding a large amount of U.S. bonds as a threat to the United States. It’s time for China to use it as a political chip. This is an “international common practice.”

Source: People’s Daily, March 11, 2010