- The Washington Times - Monday, February 23, 2009

BEIJING | Secretary of State Hillary Rodham Clinton is urging China to continue investing in U.S. Treasury bonds and says that country’s continued investment in the U.S. is a recognition that the two countries depend on each other.

“I certainly do think that the Chinese government and central bank are making a smart decision by continuing to invest in Treasury bonds,” she said during an interview with the show “One on One” on Sunday. “It’s a safe investment. The United States has a well-deserved financial reputation.”

In order to boost the economy, the U.S has to incur more debt, she said.

“It would not be in China’s interest if we were unable to get our economy moving,” Mrs. Clinton said. “So by continuing to support American Treasury instruments, the Chinese are recognizing our interconnection. We are truly going to rise or fall together. We are in the same boat, and thankfully, we are rowing in the same direction.

“Our economies are so intertwined, the Chinese know that to start exporting again to their biggest market, namely the United States the United States has to take some very drastic measures with this stimulus package, which means we have to incur more debt.”

With the export-heavy Chinese economy reeling from the U.S. downturn, Mrs. Clinton has sought in meetings with President Hu Jintao, Foreign Minister Yang Jiechi and Prime Minister Wen Jiabao to reassure Beijing that its massive holdings of U.S. Treasury notes and other government debt would remain a solid investment.

Mrs. Yang responded that China wants to see its foreign exchange reserves — the world’s largest at $1.95 trillion — invested safely and wanted to continue working with the United States.

“I want to emphasize here that the facts speak louder than words. The fact is that China and the United States have conducted good cooperation, and we are ready to continue to talk with the U.S. side,” Mr. Yang said.

During her trip to China, Mrs. Clinton’s emphasis on the global economy, climate change and security were meant to highlight the growing importance of U.S.-China relations, which have often frayed over disagreements on human rights. Authorities in Beijing face a year of sensitive anniversaries — 20 years since the crushing of the Tiananmen Square democracy movement and 50 years since the failed Tibetan uprising that forced the Dalai Lama into exile.

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