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China need not worry about US - Obama

CHINA can have confidence in the American economy and its sizable investments in the United States are safe, says American President Barack Obama.

"Not just the Chinese government, but every investor can have absolute confidence in the soundness of investments in the United States," Obama said in his talks with Brazilian President Luiz Inacio Lula da Silva at the White House on Saturday.

On Friday, Chinese Premier Wen Jiabao expressed concern about the safety of the estimated US$681.9 billion China had invested in US government debt by last November. China is Washington's biggest foreign creditor and Obama's administration is counting on the Chinese to help pay for its US$787 billion economic stimulus package by buying US bonds.

"Of course we are concerned about the safety of our assets. To be honest, I'm a little bit worried," Wen said. "I would like to call on the United States to honor its words, stay a credible nation and ensure the safety of Chinese assets."

But Wen - and all the other investors - needn't worry, Obama said.

"There's a reason why even in the midst of this economic crisis you've seen actual increases in investment flows here into the US," he said. "I think it's a recognition that the stability not only of our economic system, but also our political system, is extraordinary.

"I think that not just the Chinese government but every investor can have absolute confidence in the soundness of investments in the United States," he said.

Obama also said that the US would push for stricter regulation of the financial industry "front and center" at the Group of 20 nations summit in London on April 2, playing down divisions between the US and Europe over how to tackle the world's financial crisis.

Obama said the notion that the US and Europe were already taking sides, with America pushing for more stimulus spending and European nations favoring tighter regulation of the financial industry, was a "phony debate."

"I can't be clearer in saying that there are no sides," Obama said after his meeting with the Brazilian president.

He said a full range of approaches, including stimulus spending such as his own recently enacted US$787 billion package and financial regulation, was needed to help revive the global economy.

"In my mind, at least, there is no conflict or contradiction between the positions of the G20 countries and how we're going to be moving forward," Obama said.

Silva said the crisis gave world leaders an "extraordinary opportunity" to demonstrate they were capable of handling major issues.

"We are in a large ship and water is leaking," Silva said. "Now is the time to fix the leaks and make the economy get back on the tracks."


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