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China's SAFE Official Statement Denies Disposing Of Eurobond Holdings

Submitted by Tyler Durden on 05/27/2010 08:11 -0400

There has been much talk about the FT's story that China could be evaluating its eurobond holdings. So much in fact that the Chinese State Administration of Foreign Exchange has issued an official statement denying the validity of the story: an unprecedented step by the Chinese to respond to market rumors. We are surprised that SAFE actually found time to write this up with all the EUR buying that everyone in China seems to be doing these days. "China's foreign exchange reserves as a responsible long-term investors, and always adhere to the principle of decentralized investment, the European market in the past, present and future foreign exchange reserves are one of the most important investment market." For a minute there we wonder what they were expected to say: "Yes, we are only buying gold and oil going forward. So please don't buy it ahead of us."

Google translated from Chinese:

Head of the State Administration of Foreign Exchange on foreign reports about the "China Eurobonds held by SAFE are evaluating," A reporter asked the question
----------------------------------------------------------------------------------------- -------------------------------------------------- ---------------------------------------

"China Eurobonds held by SAFE are evaluating," What is your comment?
The head of the State Administration of Foreign Exchange:
The reports are groundless.
China has always firmly supported the EU integration process. We support the European Union and the International Monetary Fund package of financial stability measures being taken. I believe the joint efforts of the international community, the euro zone will be able to overcome difficulties and maintain the stability of European financial markets and healthy development.
China's foreign exchange reserves as a responsible long-term investors, and always adhere to the principle of decentralized investment, the European market in the past, present and future foreign exchange reserves are one of the most important investment market.

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Thu, 05/27/2010 - 08:18 | 376463 Aknownymouse

You know it is true if they have to come out and deny it.

Thu, 05/27/2010 - 08:47 | 376494 LeBalance

"in an unprecedented statement..."

Oops!

Thu, 05/27/2010 - 08:27 | 376472 LoneStarHog

The financial media are either complicit Whore Street bitches and/or lousy Chess players, at which the Chinese excell.

Thu, 05/27/2010 - 08:48 | 376498 LeBalance

..and..

Thu, 05/27/2010 - 08:28 | 376474 papaswamp

Wow that was a non statement if I ever saw one.

Thu, 05/27/2010 - 08:51 | 376506 chunkylover42

Even if this is true, the Chinese did not really say anything meaningful. Basically their position is, "no change, no comment". And the futures rally 2% on that? Repeat, nothing has changed. China is doing nothing differently.

There is no market-moving news here and I suspect the poor retail guys who buy in after this thing runs 5-7% are going to be very disapointed.

Thu, 05/27/2010 - 09:09 | 376541 SWRichmond

So while everyone was waiting for the Chinese to dump Treasuries, we pulled the rug from under the Euro. Ha Ha, fooled you.

Thu, 05/27/2010 - 09:31 | 376606 Portugal

You should probably think the other way. China is buying the (cheap) Euros that US and UK investores are trying to destroy for a few months now. Probably China knows that its better to have Daimler, Ferrari, LVMH, Bulgari, you name it Shares, than GM, Chrysler, "", Tommy Hilfiger, so on. The first ones will outlive the second ones even if a problem is currently under way...

Thu, 05/27/2010 - 09:36 | 376618 Gromit

+ 1.22

PRC leaders are not interested in performance on investments in the Western sense, rather they are keen to stay in power. Which means keeping factories churning out stuff to sell to the West, which means don't let the Euro go too far down!

Thu, 05/27/2010 - 09:56 | 376666 Tic tock