China’s premier worried for U.S. investments

Beijing has high expectations for U.S. President Barack Obama’s economic recovery strategy, but worries remain about the safety of China’s assets in the United States, Premier Wen Jiabao said on Friday.

Speaking to reporters following the end of the National People’s Congress, Wen remained committed to Chinese government projections forecasting 8 percent growth in 2009. But Wen tied those growth forecasts to concern over China holding vast amounts of U.S. government debt. China is the United States’ biggest creditor. “We have loaned a huge amount of money to the United States,” Wen said at a news conference in Beijing. “Of course, we are concerned about the safety of our assets. To be honest, I’m a little bit worried. I would like for you [a Western reporter] to call on the United States to honor its word and stay a credible nation and ensure the safety of Chinese assets.” He noted that Obama “has introduced a host of steps to tackle the international financial crisis” and said he has “high expectations” for those steps. Wen said that although China has purchased “a huge amount” of foreign-exchange reserves, the country has tried to fend off risks by purchasing diversified interests as the economic crisis has gripped the world.

Don’t Miss
U.S., China discuss human rights, economy

Economy, Taiwan top Wen address

In-depth:  China

He outlined a $1.18 trillion stimulus plan, calling it “a massive government investment.” It will be “mainly for projects that include people’s well-being,” — technological upgrades, environmental protection, increased farm subsidies, infrastructure and housing projects, including improved housing for people living in shanty towns, he said at the annual session, during which he answered questions from reporters for about two hours. The premier reiterated projections that China’s economy will grow by 8 percent in 2009, despite doubts expressed by domestic and international economic observers.

“I will admit it will be a difficult job. This being said, I also believe with considerable efforts it’s possible for us to obtain this goal,” Wen said. He said it would be possible because China is accelerating its urbanization and industrial development, is working on increasing consumer consumption, and is not struggling with financial liquidity.