Dollar assets key part of China's reserves: Xinhua: Financial News - Yahoo! Finance

Dollar assets key part of China's reserves: Xinhua: Financial News - Yahoo! Finance: "Dollar assets key part of China's reserves: Xinhua Saturday August 11, 11:36 pm ET BEIJING (Reuters) - China on Sunday delivered a vote of confidence in the dollar, saying dollar assets form an important part of its foreign exchange reserves and the U.S. currency plays a prominent role in the global monetary system. The comments, made to the Xinhua news agency by an unidentified central bank official, follow a report last week by a British newspaper suggesting that Beijing could dump its vast dollar holdings if a trade war broke out with Washington. 'U.S. dollar assets, including American government bonds, are an important component of China's foreign exchange reserves as the dollar enjoys a major position in the international monetary system based on the large capacity and high liquidity of U.S. financial markets,' Xinhua quoted the official as saying. Britain's Daily Telegraph said on Wednesday that 'the Chinese government has begun a concerted campaign of economic threats against the United States,' and was hinting that it might liquidate its holdings of U.S. Treasuries if Washington imposed trade sanctions. The story caused a stir in global markets. U.S. President George W. Bush said China would be foolhardy to dump dollars, while the top Republican on the U.S. Senate Finance"