SHANGHAI AND BEIJING — Showing China's growing economic muscle, the nation's premier Friday expressed concerns about the stability of U.S. government bonds in Chinese hands and urged Washington to provide assurances to its largest foreign creditor.
"To be honest, we are a little bit worried," Wen Jiabao said at the closing news conference of China's annual legislative session. "We have loaned huge amounts of money to the United States, so of course, we have to be concerned. We hope the United States honors its word and ensures the safety of Chinese assets."
Analysts said that Wen's concerns were natural, given that China holds roughly $1 trillion of U.S. Treasury and other government-backed bonds, and that Washington is now looking to borrow record sums to try to dig out of the recession.
Still, his surprisingly candid comments reflected Beijing's increasing confidence and assertiveness in a global economy in which the communist nation is banker to the world's richest country.
His words would not have been lost on Washington. The White House is counting on China to continue holding American debt and making future purchases to support President Obama's $787-billion economic stimulus plan. China's big appetite for Treasury issues has helped keep U.S. interest rates low and thus supplied cheap credit for Americans to buy homes and other goods.
Now, the U.S. needs China to continue bankrolling its spending to help it pull out of the worst economic downturn in decades, even as China needs the U.S. to buy its manufactured goods to keep people employed.
Wen also made it clear that China would not be bullied into adjusting its currency value. U.S. manufacturers and lawmakers have long complained that the artificially low yuan gives Chinese exporters an unfair trade advantage.
"No country in the world has the right to put pressure on the devaluation or appreciation of the Chinese currency," Wen said.
Analysts doubted that Wen's remarks were impromptu. Rather, they were probably intended in part to send a message -- perhaps pointedly to Americans -- about just how reliant they are on the Chinese for their economic security.
"I suppose you could kind of view it as a shot across the bow," said Mark Williams, Asia economist at Capital Economics in London.
