Seeking Alpha Seeking Alpha Portfolio App for iPad  There are a
couple of reasons why China may not dump their significant
investments in US treasuries in a hurry.  First - and this may
sound strange - a comment from a senior Chinese official
indicated that China may need to take advantage of the stronger
currencies (read Euro) to achieve better returns for their huge
foriegn exchange reserves. These comments led currency markets
to dump dollars and move to Euro. Euro now is at all time high
against the dollar. If China really wanted to do this, why would
a senior national official speak out so publicly against an
investment in which they hold large numbers? The comments have
decreased the value of their holdings significantly and
increased the price of their future investments (Euro).
Secondly, most of Chinese export revenue comes from the US
(something like $200 billion out of $270 billion total exports
goes to US). These exports are the primary driver of economic
growth in China. As I have noted before, C