China can now bypass Wall Street when buying US government debts, and it is the U.S. Treasury's first-ever direct relationship with a foreign government, Reuters reported Monday, citing the Treasury's documents.

　　While all the other countries have to go through primary dealers on Wall Street to buy and sell U.S. bonds, China now only has to sell, not buy, through these brokers, Reuters reported.

　　The People's Bank of China, the country's central bank, has a direct computer link to the U.S. Treasury's bond auction system, and China used it to buy two-year notes in late June 2011, the report said.

　　"The situation is more or less the same (as what was reported)," the central bank source said. The two countries came up with the special arrangement after Fannie Mae and Freddie Mac were ordered to delist from the New York Stock Exchange in July 2010, the source said.

　　"The direct access is an acknowledgement of critical importance of China to the U.S.' ability to fund its deficits. It gives China more power in bidding without showing its hands to Wall Street banks and other potential competition," Dariusz Kowalczyk, a senior economist at Crédit Agricole CIB, told the Global Times yesterday.

　　China, which holds $1.2 trillion in U.S. Treasuries, should not be "flattered" by the U.S. special treatment, said Tan Yaling, president of the China Forex Investment Research Institute.

　　"It is the US' strategy to use China's over $3 trillion foreign reserves to patch the holes in the U.S. economy, so of course they want to flatter us. But we don't have a clear, long-term forex investment strategy of our own," she noted.

　　China once held up to $397.6 billion worth of debts issued by Fannie Mae and Freddie Mac, Beijing Times reported in March 2009, citing Chinese Vice Premier Wang Qishan. The U.S. Treasury agreed to invest up to 200 billion U.S. dollars in the agencies to keep them afloat after the 2008 financial debacle.

　　China's large debt holding in the failing agencies created public concerns, and forced the State Administration of Foreign Exchange to issue an announcement in February 2011 claiming that China had never invested in Fannie Mae and Freddie Mac stocks.

　　"The direct access does not seem to have any material impact on the safety of China's investments in the U.S., but there may be improvement in terms of better transparency between the governments," said He Liping, a finance professor at Beijing Normal University.

　　The arrangement does not change the big picture of excessive concentration of Chinese reserves in U.S. Treasuries, Kowalczyk said. "If the US defaults, China will not enjoy any special protection of its investment."

　　Experts said that the key for ensuring the safety of China's foreign assets is diversification.

　　While Tan said China should buy more oil and gold, Wang Jianmao, an economics professor at China Europe International Business School, said the government should allow Chinese people to buy foreign companies' stocks.