China Looks to Buy American

Seeks investments to adjust yuan growth; US official set for talks
By Jim O'Neill,  Newser User
Posted Dec 10, 2007 7:27 PM CST
A Bank of China employee counts Chinese 100 Yuan notes at a branch outlet in Beijing, China.   (Associated Press)
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(Newser) – China, increasingly being called upon to more rapidly adjust the growth of the yuan against the dollar, is looking to expand its investment in US assets as a way to funnel its powerhouse currency out of the country, Bloomberg reports today. Treasury Secretary Henry Paulson visits Beijing Wednesday for a third round of strategic trade talks, and will push yuan appreciation as a consumer price control measure.

China “needs to be looking to opportunities provided by the weakening US dollar,” said one Chinese economist; one national fund has said it will be a "stabilizing force" amid the credit crisis. The US, meanwhile, hopes a stronger yuan will help US exports to China, where inflation hit 6.5% in October. The yuan is up 12% against the dollar since 2005.