China tried Wednesday to allay concern about the political impact of its $2.5 trillion foreign reserves, saying they are not a “nuclear weapon” to control other nations and its vast holdings of U.S. Treasury debt “should not be politicized.”
In the second in a series of statements this week on its handling of the reserves, the foreign exchange agency said its investments are judged on economic grounds. It expressed hope they would be beneficial for China and the countries where it invests.
The statement appeared to be an attempt to defuse concerns in the United States and elsewhere over whether Beijing might threaten to sell off Treasurys or other holdings to punish them in political disputes. China is Washington’s biggest foreign creditor, with just over $900 billion invested in Treasurys.