Beijing not targeting short-term gains in international market, says regulator China is a responsible investor in international financial markets and its holdings of US Treasury bills are a long-term investment, says a top mainland foreign exchange regulator. State Administration of Foreign Exchange vice-director Wei Benhua's remarks, carried by the official China Securities Journal yesterday, were apparently the latest mainland effort to alleviate international fears that Beijing might be considering the sale of some of its holdings of US dollar-denominated assets. However, Beijing was 'actively' considering expanding the investment of its exchange reserves, but would not set up a special institution to do so, Mr Wei was quoted as saying at a forum on Sunday. The remarks followed reports that China had surpassed Japan as the world's largest holder of foreign exchange reserves. The China Business News reported last week that the mainland's foreign exchange reserves reached US$853.7 billion at the end of February, compared to Japan's US$850.06 billion. United States lawmakers said recently that China's large holdings of US assets might pose a threat to US economic security if Beijing decided to sell them. Domestic critics have also urged the government to diversify the investment of the reserves to reduce risk and improve returns. 'In the management of foreign exchange reserves, China adheres to the principles of security, liquidity and profitability,' Mr Wei said. 'China is a responsible investor in the international market and is not targeting short-term gains.' The central bank had earlier denied market speculation that it planned to sell US dollar assets. China has invested a large part - estimated between 70 and 80 per cent - of its huge reserves in US bonds and assets. It held US$262.6 billion in US government treasury bonds at the end of January, making it the largest single investor after Japan. By pumping up demand for Treasuries, Beijing has helped to drive down US interest rates but has also gained leverage in its dealings with Washington.