The Asian country went from holding 867.1 million dollars in US Treasury bond holdings last December to 859.4 million in January this year.
China continued to reduce its holdings of US Treasuries earlier this year, according to the latest data of that department of the US Government, published this Wednesday on its website.
Specifically, Beijing went from having 867.1 million dollars in US debt in December 2022 to 859.4 million in January of this year. In this way, the Asian giant has 174.4 million less than in the same month of 2022, which places its holding of US Treasury bonds at lowest level since May 2009.
Despite this reduction, China remains the nation with the second largest holdings of US Treasury bonds, only behind Japan, which currently has 1,104.4 million dollars. United Kingdom (668.3), Belgium (331.1) and Luxembourg (318.2) occupy the third, fourth and fifth position, respectively.
What’s going on?
According to him South China Morning PostThis comes amid rising long-term interest rates, which slashed returns on China’s investments abroad after the US central bank, the Federal Reserve, accelerated cost increases. of loans last year.
It also points out that from Beijing distrust more and more of US dollar dominance in international transactions, since their relations with the US have deteriorated amid growing threats of financial sanctions from Washington, for which they have sought to diversify their investment portfolio.
Zhang Ming, deputy director of the Department of International Finance at the Institute of Finance and Banking of the Chinese Academy of Social Sciences, believes that investors selling US Treasuries is partly due to the fall of their price.
“After the Russia-Ukraine conflict, to reduce the risk of freezing foreign exchange reservesthe People’s Bank of China took the initiative to reduce the US dollar allocation of foreign exchange reserves on a large scale,” the expert added.