China parliament official calls for cut in US debt holdings

First one out of the Gate ... now the rest will follow.

BEIJING (AFX) - China should gradually cut its holdings of US debt, a senior Chinese parliament official said.

Cheng Siwei, vice-chairman of the National People's Congress, was quoted by the Wen Wei Po as saying in Hong Kong that Beijing should stop buying US debt and cut its current holdings.

He also said that China should increase purchases of US goods to help reduce the trade imbalance, according to the Hong Kong newspaper.

Cheng added that all of these moves should be carried out gradually.

China held 256.7 bln usd worth of US treasury debt as of the end of last year, making it the second largest holder. Last year, China's net purchases of US treasurys stood at 38.7 bln usd, accounting for half of all net purchases of US treasury bills and bonds.