The People's Republic of China celebrates its 60th anniversary since the Revolution of 1949 that brought the Communist Party to power.
Originally uploaded by Pan-African News Wire File Photos
By Howard Schneider
Washington Post Staff Writer
Tuesday, January 11, 2011; 10:37 PM
The thorniest problem in economic relations between the United States and China is getting worse, just as the world's two biggest economies prepare for a summit next week in Washington.
At issue is the imbalance in their financial relationship. China's central bank said Tuesday that Beijing's holdings of foreign cash and securities amount to $2.85 trillion - a jump of 20 percent over the year before - despite Chinese promises to try to balance its trade and investment relations with the United States and other countries.
China added $200 billion to that stockpile in the last three months of the year alone, as the country socked away capital from the rest of the world at a torrid pace.
The reserves are so large and the recent run-up so rapid that it's casting new doubts over whether Beijing is reforming the handling of its currency and curbing its heavy reliance on exports as a source of jobs and growth.
Relations between China and the United States have been rocky on several fronts. The agenda for discussions between presidents Obama and Hu Jintao include military tension on the Korean Peninsula, and North Korea's nuclear program; competition between Washington and Beijing for influence throughout Asia; human rights; trade; and even concerns about the security and intelligence implications of China's involvement in the U.S. telecommunications sector.
Concern over China's economic policies have mounted as its reserves have grown to roughly a third of the $9.1 trillion dollars in foreign exchange holdings that all central banks reported to the IMF in 2009. China's holdings are more than those of Japan, Russia, South Korea, Taiwan, Saudi Arabia and the euro-zone countries combined.
China repeats fighter jet test not connected to Gates' visit
Jan 10 2011
BEIJING | Tue Jan 11, 2011 9:47pm EST
BEIJING (Reuters) - China's stealth fighter test flight had no connection to Defense Secretary Robert Gates's visit, a senior Chinese diplomat said on Wednesday.
"China's defense policy is defensive and not directed at any other country," Vice Foreign Minister Cui Tiankai told reporters during a press conference ahead of Chinese President Hu Jintao's visit to the United States.
Cui was citing Tuesday's statement from China's Ministry of Defense.
The comments came a day after China confirmed a maiden test-flight of its J-20 fighter jet prototype during Gates's visit, which is aimed at defusing military tensions.
(Reporting by Chris Buckley, Writing by Michael Martina; Editing by Ken Wills)
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