Richard Fisher, president of the Dallas Federal Reserve Bank and a member of the US central bank's policy-setting Federal Open Market Committee, said China had no reason to scale back its holding of US debt.

"I don't see why they would. The Chinese are very sophisticated, they understand us very well," he told reporters in Hong Kong.

"I don't... detect any desire on the part of the Chinese authorities to do anything that might not help us, or upset the apple cart of restoring a good tone in the credit markets and regrowing our economy."

China became the world's top holder of US Treasury bonds last September, and currently holds around 800 billion dollars, according to official US data.

But some Chinese commentators have voiced frustration that Beijing has not found higher-yielding investments for its huge forex reserves and that the huge US stimulus measures could drive down the value of dollar-based assets.

In a rare expression of official concern over Beijing's huge bond holdings, Chinese Premier Wen Jiabao last month called on the United States to safeguard its investments.

Fisher was speaking in Hong Kong as part of his Asian tour, which will see him head to Beijing and Shanghai.

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Beijing (AFP) May 1, 2009
China's manufacturing activity expanded in April to its highest level for a year, according to data released Friday, in an indication that the nation's economy might be showing signs of recovery.