Over time, the Chinese yuan will become one of the world's major currencies and most likely the dominant currency of Asian trade, said Wu Xiaoling, former deputy governor of the People's Bank of China. But economists said too much is being read into China's reduced purchases of U.S. Treasuries. While diversifying China's reserves appears to be unavoidable in the long run, in the short term, it will be difficult for China to move away from owning assets denominated in U.S. dollars, economists said.

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