Is China secretly buying U.S. debt?
Joe McDonald A decline in China’s declared holdings of U.S. Treasury bills comes as it is trying to diversify its foreign assets. But analysts say Washington’s debt is still the only asset big enough to absorb the trade-fueled flood of cash Beijing needs to invest, and it might be adding to its hoard with secret purchases through banks abroad. A U.S. government report this week showed Chinese holdings of Treasury bills fell by $34-billion (U.S.) in December. That fueled concern Washington might have to pay higher interest to attract creditors to finance this year’s forecast $1.5-trillion budget deficit. It came as Chinese leaders, facing pressure to pay for social spending and other expenses, are trying to make more money by diversifying their $2.4-trillion in reserves beyond safe but low-yielding Treasurys. A $200-billion sovereign wealth fund launched in 2007 is investing in riskier but more profitable stocks and commodities. Analysts say the true size of Chinese holdings of U.S. gov
Some observers suggest China may be buying U.S. Treasury bills anonymously. Their comments follow U.S. data earlier this week showing China shed $34-billion (U.S.) in Treasury bills in December, putting Japan back on top as the leading holder of the debt. But analysts told The Associated Press they believe China’s holdings are really larger because it is acquiring Treasuries anonymously through financial institutions overseas. “What they are doing is diversifying the channels through which they make these buys so that it is much more hard for the market to ascertain what they are doing,” the managing director of a Beijing research firm told the news agency. Read the tale Related: China unloads $34-billion of U.S.
Interesting piece from the globeinvestor website..an excerpt, then the link.. Analysts believe holdings of Treasury bills bigger than reported through anonymous purchases Joe McDonald Thursday, February 18, 2010 Beijing A decline in China’s declared holdings of U.S. Treasury bills comes as it is trying to diversify its foreign assets. But analysts say Washington’s debt is still the only asset big enough to absorb the trade-fueled flood of cash Beijing needs to invest, and it might be adding to its hoard with secret purchases through banks abroad. A U.S. government report this week showed Chinese holdings of Treasury bills fell by $34-billion (U.S.) in December. That fueled concern Washington might have to pay higher interest to attract creditors to finance this year’s forecast $1.5-trillion budget deficit. It came as Chinese leaders, facing pressure to pay for social spending and other expenses, are trying to make more money by diversifying their $2.4-trillion in reserves beyond safe b
Some observers suggest China may be buying U.S. Treasury bills anonymously. Their comments follow U.S. data earlier this week showing China shed $34-billion (U.S.) in Treasury bills in December, putting Japan back on top as the leading holder of the debt. But analysts told The Associated Press they believe China’s holdings are actually bigger because it is acquiring Treasuries anonymously through financial institutions overseas. “What they are doing is diversifying the channels through which they make these purchases so that it is much more difficult for the market to ascertain what they are doing,” the managing director of a Beijing research firm told the news agency. Read the story Related: China unloads $34-billion of U.S.
Related Questions
- I am buying different products from different factories in China. Can I make the the import of all different products from different factories through one company?
- How other European and American companies are buying from China? How they succeed in sustainable quality if the products made in China?
- Is China secretly buying U.S. debt?
