BEIJING: China has effectively addressed potential risks in its investments in bonds issued by U.S. mortgage finance giants Fannie Mae and Freddie China's foreign exchange regulator said on Saturday.

The State Administration of Foreign Exchange (SAFE) said in a statement on its website that it believed Washington would be prudent in managing the two agencies.

SAFE said on Friday that it had not suffered any losses on investments in the bonds of Fannie and Freddie, responding to local media reports that China might suffer up to $450 billion in losses on its investments in U.S. agencies' bonds