Paulson on Monday expressed confidence that foreign governments and investors who hold securities, such as U.S. Treasuries, do so "because they've got confidence and they know that they're getting the best risk-adjusted rate of return."

Paulson did express some carefully couched criticism of China, saying that he was concerned about "protectionist sentiment" there, but quickly qualified that to say it could also be found elsewhere.

In recent months, Beijing has placed limits on real estate investment, tightened controls on mergers and acquisitions, imposed a series of new regulations tightening restrictions on some kinds of foreign investment and new distribution regulations for foreign news agencies.

AP Economics Writer Martin Crutsinger in Washington contributed to this report.

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