China optimizes foreign exchange reserve structure

Nation likely to increase investments in non-dollar assets, say economists

Economists and policy advisers have said that it is a strategic necessity for China to further scale back holdings in United States government debt in order to safeguard national financial stability, amid waning confidence in the dollar-based system and persistent geopolitical tensions.

To pursue a more balanced, controllable allocation of foreign exchange reserves, the country is also likely to increase investments in non-dollar assets, including financial instruments of its Asian trading partners and crucial resources such as gold, energy and food, they added.

Yu Yongding, an academic member of the Chinese Academy of Social Sciences, called for China to continue reducing US government debt holdings in an orderly manner.