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China may move away from U.S. Treasuries
Report: Beijing's foreign exchange regulator hints it may want to diversify its massive reserves.

NEW YORK (CNNMoney.com) - China may be considering a move to diversify its foreign-currency reserves away from the U.S. dollar, according to a report published Friday.

China hinted at the shift in a statement posted on the Web site of the state agency charged with regulating foreign exchange, the Wall Street Journal reported.

China wants "perfect management of our foreign-currency reserves, and to actively explore more efficient use of our reserve assets, to improve the currency structure and asset structure of our reserves, and to continue to expand the investment areas," the newspaper quoted Hu Xiaolian, the director of State Administration of Foreign Exchange, as saying in the statement.

The statement is a clear sign Beijing is interested in moving into other currencies, the Journal said, citing a research note by Stephen Green, senior economist for Standard Chartered Bank. "We believe this is a serious U.S.-dollar negative," Green wrote.

China is the second-largest foreign holder of U.S. Treasuries, after Japan. According to the newspaper, China held $247.6 billion of Treasuries at the end of October, compared to Japan's $681.6 billion.

China's massive foreign-currency holdings measured $769 billion at the end of September, the report said.

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