* Majority of U.S. participants polled believe U.S. bonds
* Chinese business, opinion leaders, and public, doubt
safety of U.S. bonds
By Ellen Freilich
NEW YORK, April 27 Three-quarters of U.S.
business and opinion leaders recently surveyed believe
investments between the United States and China will boost
Chinese purchases of U.S. Treasury bonds, but U.S. and Chinese
respondents sharply diverged over whether U.S. Treasury bonds
were safe investments.
In the United States, 89 percent of policymakers, 89 percent
of business leaders, 56 percent of "opinion leaders" and 56
percent of the general public thought U.S. Treasury bonds were a
safe investment, the survey found.
But in China, which has invested heavily in U.S. Treasury
bonds, only 12.8 percent of the general public, 28.7 percent of
opinion leaders and 36.4 percent of Chinese business leaders
thought U.S. Treasury bonds were a safe investment.
The perceptions about U.S. Treasury bonds were revealed in a
comprehensive poll about attitudes toward China and the United
States conducted by Harris Interactive in the United States and
Horizon Research Consultancy Group in China.
The survey, comparing views of American and Chinese business
and opinion leaders and members of the public, was sponsored by
the Committee of 100, a group of Chinese Americans prominent in
business, government, academia and the arts.
From the Chinese perspective, the perception that U.S.
Treasury bonds are not a safe investment derives from the
financial crisis of 2008, said Dominic Ng, chairman of the
Committee of 100 and chairman and chief executive officer of Los
Angeles-based East West Bank.
"China looked up to the United States as being the smartest
in the world in terms of understanding how to create a free
market," Ng said. "And because China also has a very strong
balance sheet, it put a lot of its surplus into U.S. dollars
because they felt it was the safest investment."
But witnessing the financial turmoil of 2008 took a toll on
"A major liquidity crisis, job losses and foreclosures
created some disillusion among the Chinese public and opinion
leaders because this western free market model they had looked
up to really didn't work as well as they thought," Ng said.
"The western free market model they'd been lectured about
for years blew up in front of their eyes."
With China's substantial investment in U.S. Treasury
securities, the 2008 crisis "created unease," Ng said,
That discomfort persists even though U.S. Treasuries rallied
strongly during the crisis and afterward.
"Most Chinese, from opinion leaders to the general public,
do not understand the intricacy about why Treasuries are so safe
because they do not have all the information about how the U.S.
economy works," Ng said.
In reality, accommodative monetary policy in a
non-inflationary environment fed a rally in U.S. Treasuries.
"People in China worried, but actually came out OK," Ng
said. "It's all perception. China needs to keep a substantial
amount of foreign reserves and the U.S. dollar relatively is the
The English-language survey was conducted in the United
States between December 14, 2011 and January 31, 2012. A total
of 1,400 interviews were completed, including 1,000 among the
general adult population and 400 across various business elites,
opinion leaders, think tank executives and congressional
The Chinese-language survey was conducted in China between
December 12, 2011 and January 16, 2012. A total of 4,153
interviews were completed, including 3,775 among the adult
population and 378 across various business elites and opinion