Govt keeping close tabs on crisis in US

The authorities are following closely Washington's response to the ongoing financial crisis as the turmoil has affected Chinese investment in the United States, especially the large amount of US bonds being held by the country, Chinese ambassador to the US Zhou Wenzhong has said.

"As China holds large amounts in Fannie Mae and Freddie Mac shares and in US bonds, the financial storm has definitely impacted Chinese investment. So we're paying a good deal of attention to the crisis," said Zhou in a speech on China-US trade relations at the Center for National Policy in Washington DC, on Wednesday.

The China Newsweek magazine reported on Oct 9 that $1.2 trillion of the country's $1.8 trillion foreign exchange reserves are held in the US markets. Nearly half of the funds have reportedly gone to US government housing insurers Fannie Mae and Freddie Mac, while most of the remaining half are in US bonds.