China is reviewing its euro zone bond holdings because of growing concerns about gaping deficits in countries including Greece and Portugal, the Financial Times reported on Wednesday.

The FT said representatives of China's State Administration of Foreign Exchange, or SAFE, which manages the reserves under the country's central bank, has been meeting with foreign bankers in Beijing in recent days to discuss the issue.

SAFE, which holds an estimated $630 billion (437.2 billion pound) of euro-zone bonds in its reserves, has expressed concern about exposure to the five so-called peripheral euro zone markets of Greece, Ireland, Italy, Portugal and Spain, the newspaper said.

The exact makeup of China's roughly $2.4 trillion in foreign exchange reserves is a state secret, but most analysts estimate it holds about two-thirds in dollar-denominated assets and the rest primarily in euros, Japanese yen, and British pounds.

Chinese Commerce Ministry officials have in recent days expressed concern about how a weakening euro would hurt exports. Premier Wen Jiabao said China stood ready to support European Union and International Monetary Fund plans to stabilize the euro area.

Fears of deeper financial market turmoil make China highly unlikely to take action now, like dumping euros, that could protect its forex reserves but risk much higher collateral damage.

SAFE is highly secretive about its management of foreign exchange reserves, going only so far in public as to say that it pursues principles of safety, liquidity and return.

China Investment Corp, the $300 billion sovereign wealth fund with a mandate to invest reserves more aggressively, told foreign bankers recently that while the euro looked worrisome, dollar and yen assets inspired little more confidence, according to a source in Beijing.

(Additional reporting by Simon Rabinovitch in Beijing; Editing by Leslie Adler)

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