http://www.bloomberg.com/apps/news?pid=20601087&sid=abzdHM_2dVMo&refer=home Clinton Urges China to Keep Buying Treasuries Feb. 22 (Bloomberg) -- U.S. Secretary of State Hillary Clinton urged China to continue buying Treasury bonds to help finance President Barack Obamaâs stimulus plan. The two nationsâ economies are intertwined and it wouldnât be in Chinaâs interest if the U.S. were unable to sell its government debt, Clinton said in an interview with Shanghaiâs Dragon Television today. China knows it needs a healthy American economy as its biggest export market, she said, adding that the U.S. must take âdrastic measuresâ to stimulate growth. âWe are truly going to rise or fall together,â Clinton said. âBy continuing to support American treasury instruments, the Chinese are recognizingâ that interconnection. China, the largest holder of U.S. government debt, boosted purchases by 46 percent last year to a record $696.2 billion as the global recession spurred demand for the securities. The Chinese government said last week it plans to keep buying Treasuries, adding that future purchases will depend on the preservation of their value and the safety of the investment. China continued to buy the U.S. debt amid a 27 percent increase in its holdings of foreign currencies in 2008. JPMorgan Chase & Co. predicted in a Feb. 6 report that China will keep buying Treasuries ânot only for the near-term stability of the global financial system, but also because there is no viable and liquid alternative market in which to invest Chinaâs massive and still growing reserves.â Chinese attempts to diversify from Treasuries into more risk-oriented assets have not fared well. It has lost at least half of the $10.5 billion it invested in New York-based Blackstone, Morgan Stanley and TPG Inc. since mid-2007. Chinaâs currency reserves of $1.95 trillion are about 29 percent of the world total. Flying Home Clinton also pledged that America would not practice protectionism. She said the âBuy Americanâ provision of the stimulus package, which says U.S. goods must be used for infrastructure projects, would be carried out in compliance with existing international trade agreements. Clinton today wrapped up a weeklong trip to Asia, her first as Obamaâs top diplomat, having already stopped in Japan, Indonesia and South Korea. She attended services at a state- sanctioned church, and met with community organizers before starting the trip home. She met U.S. troops at Yokota Air Base in Japan on a refueling stop. China and the U.S. will continue the bilateral strategic dialogue begun during the Bush administration, expanding it to include security and political issues, Clinton said yesterday after meeting with Chinese Foreign Minister Yang Jiechi. Clinton will co-chair the dialogue on the U.S. side with Treasury Secretary Timothy Geithner, she said today