Experts think it's prudent to buy dollar assets

U.S. Treasury Secretary Timothy Geithner's first visit to China has sent some positive signals. Analysts point out that Mr Geithner's visit underscores the importance the United States attaches to deepening cooperation with China in the financial and financial fields.　　Mr Geithner's commitment to US fiscal and monetary policy is to reassure China about its investment in the US, but in the current case, it still needs to be cautious about buying dollar assets.　　The economic transformation needs to work together. In his speech at Peking University, Geithner said the two countries should strengthen international financial cooperation and the United States fully supports China's more important role in the international financial system.　　Mr. Li, director of China and the World Economic Research Center at Tsinghua University, said the first step was to see the strategic significance of Mr Geithner's trip, which was of great concern to China during the special period of the international financial crisis. U.S. President Barack Obama's first round of strategic and Economic Dialogue will be held in Washington next month.　　Some analysis points out that, under the forthcoming dialogue mechanism, the focus of Sino-US financial cooperation is to jointly deal with the immediate crisis, in addition to the bilateral concerns of trade, exchange rates, energy and climate change and other hot topics of dialogue to eliminate differences, deepen bilateral cooperation is the most important to enhance mutual trust. Mr Geithner also said that a global transition to a more stable and steadier economic order depended on a massive economic overhaul of the United States and China.　　To sustain economic growth in the wake of the financial tsunami, China needs to change its export-led economic model, encourage national consumption, stimulate domestic demand and boost local and global economic growth. However, experts pointed out that the global industrial chain has been formed, in the short term it is difficult to make big changes. Chen Fengying, director of the Institute of World Economics at the China Institute of Modern International Relations, said that the pattern of international division of Labor had been formed and that the United States could not return to a manufacturing-oriented model.　　International economic imbalances are the responsibility of the US to consume too much.　　Mei Xinyu, a researcher at the Institute of Commerce, said that China's economic growth model will eventually achieve more reliance on domestic demand, but there is a process, China should take into account the adjustment of the way, method and strength, should not lose the market position established in international competition. Whether U.S. Treasuries are safe "China's dollar holdings are safe."　　Mr Geithner said he pledged that the United States would slash its huge deficit, that it would prudently use its spending, would not keep borrowing, and hoped that China would continue to invest in the US. Analysts say the Geithner statement was intended to reassure China about the value of U.S. Treasury bonds and the stability of the dollar.　　But the risk of US Treasuries is not "very safe". Chen Fengying pointed out that in response to the financial crisis, the U.S. government to the financial markets a large amount of capital injections, and tried to dilute the debt through the depreciation of the dollar. The current easing of U.S. liquidity, combined with the projected high fiscal deficit of $1.84 trillion trillion this year, is raising the risk of inflation, with key US Treasury bondholders, such as China, facing the risk of asset impairment.　　The United States needs to make responsible responses and actions to ensure national integrity and maintain a stable monetary policy. Last week's 10-year bond yield soared to nearly 3.75%, compared with only 2.1% left at the end of last year.Right。　　In the past 5 months, the market value of US Treasuries has fallen by an average of 5.1%. This suggests that America's longer-term bond appeal has fallen. Analysts say the main concern is that America's debt issuance is too big to supply a glut of bond markets. It is estimated that by the end of September this year, the United States government estimates a total of 3.25 trillion U.S. dollars in Treasury bonds. Once the market is worried about excessive supply growth, it will inevitably lead to lower bond prices and higher yields, particularly against existing bondholders.　　In addition, the recent accelerated depreciation of the dollar has reduced the attractiveness of dollar assets, including bonds. By the end of March this year, China's holdings of US Treasuries amounted to $767.9 billion trillion, the US government's biggest lender, according to statistics released by the US Treasury.　　Historical data show that over the past year, China has increased its holdings of US Treasuries by more than $270 billion trillion. "Whatever the U.S. stance, China should not change the pace of external asset restructuring." "In fact, China has started to reduce long-term government bonds and buy more short-term bonds," said Mei Xin-Yu, a journalist at the China Securities Daily. "U.S. Treasury data show that from August 2008 to March 2009, China bought a total of 171.3 billion U.S. dollars for one-year and one-year Treasury bonds, while two-year and above Treasuries were only 22.9 billion U.S. dollars, while also selling 23.5 billion of dollars in long-term institutional debt."