Studio interview: Expert on China's foreign reserves

Top foreign exchange regulator, Yi Gang, has clarified China's position on forex management and reserves. For more insight, we are joined by Dr. Victor Gao Zhikai.

The foreign exchange regulator said today that holding US treasury bonds is purely market-driven behavior. He added that China is a responsible investor and the investment will be "mutually beneficial". How exactly will the investment benefit both sides?

Some American commentators worry that China's holding of US treasury bonds pose a political threat to US because Beijing might abruptly sell Treasuries. Do you see any legitimacy of this concern?

Many believe China should diversify its foreign exchange reserves because an estimated two thirds of it is in US dollars. How should China achieve diversification of its foreign exchange reserves?

Chinese top banking officials has stressed again that the RMB reform should be gradual and controlled. What is their rationale?

Some say a stronger Yuan will boost consumer buying power and reduce dependence on exports. Thus will help transform the pattern of China's economic growth. To what extent do you agree?