China's Investment in US Treasuries during the Financial Crisis

China purchased US Treasuries during the financial crisis as they were accumulating reserves rapidly. However, they were surprised to find out that these were not government-guaranteed but agencies. Hank Paulson assured the Chinese that despite not being official guarantees, measures were in place to stabilize the situation. China even rejected a joint bear raid proposal with the Russians on these agencies. The Chinese banks withdrawing money from money markets also added to the complexity of the situation.