According to the U.S. Treasury Department on August 16 released the latest data , as of the end of 2010, 6 , Chinese holdings of U.S. treasuries 8,437 billion U.S. dollars , although still the largest creditor is the U.S. government , but June has holdings of U.S. Treasury 24 billion U.S. dollars , Accumulated during the first half of this year 51.1 billion holdings of U.S. Treasuries . In reducing dollar-denominated assets , China 's foreign exchange reserves in yen assets , the won currency assets and other assets of steady growth. Japan's Finance Ministry on August 9 disclosed statistics show that in June China 's net purchases of Japanese government bonds amounted to 4,564 billion yen, the first half of this year bought about 20 billion U.S. dollars worth of Japanese securities in the past five years The amount of yen to buy assets, nearly five times . In addition, the South Korean Financial Supervisory latest data show that in June this year , South Korean treasury bonds China holds 3.99 trillion won , up 111% over the previous year , second only to Luxembourg and the United States held the third-largest net increase of South Korean bonds Country. Other currencies are also eagerly awaiting , but only the beginning has shaken the global financial markets. Chinese holdings of U.S. assets holdings of other currencies to the international market of space assets, many treatments, but also strongly affect the international investors nervous .

China's largest foreign exchange reserve position is taken into account the risk of depreciation against the dollar , to avoid the hijacked American strategy , diversification of investments to improve profitability , enhance market power, the Chinese central bank intervention in foreign exchange results.

Currently, the U.S. economic recovery is weak , the unemployment rate remains high , the federal and local finances have deteriorated and bond prices of credit default swaps (CDS) to accelerate the rise of international investment institutions have been talking about the U.S. economy will repeat itself , " Japanese-style deflation , "the story . Federal Reserve (FED) to stimulate the economy , the recent re- start the quantitative easing monetary policy, resulting in the federal funds lending rate and bond interest rates dropped significantly , only one step away from a liquidity trap . U.S. economy in the short term do not see substantial dawn. Moreover, the U.S. trade deficit is still rising , the proportion of GDP, the current trade deficit of about 4 %. Ongoing massive U.S. trade deficit can not reduce the net external debt , the end of 2009 the U.S. net external debt to GDP, 28.95% , net external debt to exports accounted for 272% . Such a high net foreign debt has exceeded the use of export foreign exchange earnings to repay their debt , the United States can only use U.S. dollars of international currency status , the printing of more money directly to pay its trade deficit , while taking advantage of the dollar value of net debt reduction .

We use cross- asset portfolio model , if long-term economic growth rate in the United States remained at 2.5% , according to Obama 's recent 5-year plan to double trade and trade balance of strategy , the United States to deficit / GDP to 2% reduction Within the level of the net external debt / GDP at current levels no longer control the deterioration of the dollar exchange rate depreciation in the medium term should be 30%. Depreciation of U.S. dollar foreign exchange reserves in China is a hanging head " sword of Damocles . " Moreover, China has about 2.5 trillion U.S. dollars of foreign exchange reserves in dollar-denominated assets accounting for 70% , you can make 6000 an aircraft carrier, the U.S. strategy in a way easily hijacked .

Strengthen the capacity of the Chinese central bank intervention in the foreign exchange market also needs a large foreign exchange reserve position . Dollar peg system in the past , the Chinese central bank has been able to set the yuan against the dollar and successful in their level of control required for trading range , mainly due to China's central bank has sufficient space for handling U.S. dollar . For example, during the financial crisis in Southeast Asia , China has pledged not to devalue the RMB , U.S. dollars if the market needs , the central bank can be a lot of supply; in 2009, global economic recession, the Chinese keep the yuan stable against the dollar , if the market selling dollars , the Chinese central bank Capacity to absorb .

Now, in reference to a basket pricing mechanism , in accordance with the distribution of China 's trade status, all the major currencies have enough foreign exchange to enhance the central bank in the foreign exchange market basket in a foreign currency exchange rate of RMB against the smooth operation of the intervention , thereby keeping the yuan Effective exchange rate stable operation , serving the overall situation of macroeconomic balance . Because, when the pricing mechanism of the RMB exchange rate to a basket of currencies , if the currency basket of the dollar in international foreign exchange market on the other international currency devaluation, the central bank to ensure the effective exchange rate of RMB stable, must intervene in the foreign exchange market , selling dollars absorption The currency , which the RMB against the dollar, while the central bank buying other international currencies , the devaluation of the RMB against other international currencies , so as to maintain effective exchange rate stability. As a result, China's central bank held the hands of the best full exchange other currencies .

Typically, the number of holders of a currency exchange to meet import needs three to six months as standard . To import measure, the composition of China's foreign exchange reserves , the dollar too much , the euro right , the yen and other currencies less. At present, China's international trade in accordance with the distribution and specificity of the oil trade , the U.S. dollar clearing accounts for settlement of the China trade to about 35% of total foreign exchange ( US-China trade accounted for 13% of China's foreign trade ) , the euro settled to be 16% , Japan Million settlement to be 12% , won the balance sheet to be 7%, Hong Kong dollars to be 7%, ASEAN currencies to be 10%, India, Canada, Australia, Russia , Brazil and other currencies to be 10%, other currencies to be 3%.

However, the end of 2009 , China 's foreign exchange reserves accounted for about 70% of the dollar , the euro accounted for about 25% , the yen and other currencies totaled about 5 %, while China and the United States apart from other partners in the euro area 's total trade volume of China's global trade share 71% of the distribution of foreign exchange reserve currency structure and trade structure did not match . Therefore, in the foreign exchange reserves , the appropriate reduction of dollar reserves to maintain stability in the euro reserves , increasing the yen , Korean won, the ASEAN countries and other emerging market economies, currency is the appropriate choice.

In accordance with the import standards , China needs to increase the Japanese yen , Korean won, the ASEAN countries and other emerging market economies, currency reserves about 350 billion to 700 billion U.S. dollars , that need to be reduced from 350 to 700 billion U.S. dollars of U.S. assets to foreign exchange reserves in the current The calculation of the U.S. assets of about 1.75 trillion U.S. dollar assets may be cut by 20% to 40%, an average of 30 %!