* Adviser says dollar backed by "great country"
* Says China must buy "strategic" resources
* Says yuan band to widen, revaluation possible (Add more comments)
BEIJING, April 19 (Reuters) - The U.S. dollar will not collapse even though Standard & Poor's has threatened to cut its credit rating on the world's largest economy, Xia Bin, an academic adviser to the Chinese central bank, said on Tuesday.
"The dollar is backed by a great country, and as I've said, it will not collapse," Xia said in comments posted on a twitter-style service (t.sina.com.cn) run by news portal Sina.com.
"Indeed there are some problems in the United States because of its underlying economic structures, but the dollar will not collapse," Xia said.
Xia could not be immediately reached to confirm the authenticity of the posted remarks, but a sina.com official told Reuters the comments came from Xia.
S&P, which assigns ratings to guide investors on the risks involved in buying debt instruments, slapped a negative outlook on the United States' top-notch AAA credit rating on Monday and said there was at least a one-in-three chance that it could eventually cut it unless politicians found a way to slash the yawning budget deficit within two years. [ID:nN18231617]
Xia, who is also a senior researcher with the cabinet's think tank, said China must change the way it manages its $3 trillion foreign exchange reserves by pursuing not only investment returns but also strategic leverage.
"China must buy strategic resources for its sustainable development," Xia said, without elaborating.
China has never published its holdings of U.S. treasuries, but economists said as much as 70 percent of the country's fast-growing foreign exchange reserves -- the world's largest -- may be invested in dollar assets.
He added China could take steps to make the yuan more flexible and another one-off revaluation was also possible, without mentioning a time frame.
"We cannot rule out a one-off revaluation," Xia said .
China should also widen the yuan's trading band against other currencies to make it more flexible, Xia added. The dollar/yuan exchange rate may rise or fall 0.5 percent from the mid-point each day.
The government has repeatedly said it would not consider another one-off adjustment in the yuan's value after the 2.1 percent landmark revaluation in July 2005. (Reporting by Zhou Xin and Kevin Yao; Editing by Jacqueline Wong)