Chinese Premier Wen Jiabao said Friday that he is "worried" about the country's vast $1 trillion holdings in U.S. Treasuries and that China will pursue a policy of diversification when comes to its future foreign exchange holdings.
From the WaPo. And get this, the party started suckin' last summer. I wonder when they'll kick everyone out:
Starting last summer, China's big state-owned banks -- including Bank of China and Bank of Communications -- began dramatically reducing their holdings in Fannie Mae and Freddie Mac debt. In September, as what began as a U.S. problem began to spread around the globe, Ha Jiming, chief economist for the China International Capital Corp., warned in a report that Chinese government officials have realized that it's a "bad idea to put all their eggs in one basket." At that time, China had held a fifth of its currency reserves in Fannie and Freddie debt.