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Comment by justincormack | Hacker News Reader

China of course has a few trillion in US Treasury bills burning a hole in its pocket (they dont belong to Alibaba but they presumably have RMB to change for them). The only sane solution for China is to start buying real assets in the US. One official recently suggested they buy Intel, Apple and Boeing. But hey why not Yahoo too. There will be a lot of these purchases coming up.

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I can see Apple being on that list, but Intel and Boeing are of strategic importance to the US and I don't think congress would agree with such sales just like that.

Boeing is a defense contractor so no sale would be allowed, and also you are off a bit by the amount of T-Bills China holds. It is just over 1 trillion, and has essentially held steady for the last 12 months.

http://www.treasury.gov/resource-center/data-chart-center/ti...

Total Chinese reserves are $3 trillion[1], of which over $2tr are in dollars, not all in Treasuries, some is in US mortgages etc.

Sure there is going to be some protectionism, particularly around defence.

[1] http://en.wikipedia.org/wiki/Foreign_exchange_reserves_of_th...

>US Treasury bills burning a hole in its pocket

The Chinese central government needs to maintain its high level of reserves, because under their system they are also the guarantor for all local and provincal government debt (which is enormous).

Er, what would a local or provincial government do with dollars? Unless they dollarize the economy, they would just ask to convert them to RMB. The government has bailed out some banks with dollars which they cant convert, but that is easier as its last resort capital.

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