China Looks to Buy American

China, increasingly being called upon to more rapidly adjust the growth of the yuan against the dollar, is looking to expand its investment in US assets as a way to funnel its powerhouse currency out of the country, Bloomberg reports today. Treasury Secretary Henry Paulson visits Beijing Wednesday for a third round of strategic trade talks, and will push yuan appreciation as a consumer price control measure.

China “needs to be looking to opportunities provided by the weakening US dollar,” said one Chinese economist; one national fund has said it will be a "stabilizing force" amid the credit crisis. The US, meanwhile, hopes a stronger yuan will help US exports to China, where inflation hit 6.5% in October. The yuan is up 12% against the dollar since 2005. (More yuan stories.)