China held the largest U.S. government bonds in the world as forex investment

Purchasing U.S. government bonds was one of the choices for China's huge foreign exchange reserves, which stood at nearly 2 trillion U.S. dollars, said Liu Mingkang, Chairman of China Banking Regulatory Commission Thursday.

China manages its foreign exchange reserves under the principle of maintaining safety, liquidity and profitability, Liu told a press conference on measures of banking system against financial crisis.

Premier Wen Jiabao said in an interview with the Financial Times during the Davos forum that the country was exploring more efficient ways to use its reserves to boost domestic development.

China's reserves hit a record 1.95 trillion U.S. dollars at the end of 2008, the largest in the world and far exceeding those of Japan, the second-largest foreign exchange holder with 1.03 trillion U.S. dollars.

According to the U.S. Treasury, China held 681.9 billion U.S. dollars worth of U.S. government bonds as of November, and it bought another 14.3 billion U.S. dollars worth in December.

Source from: http://news.xinhuanet.com/english