China Securities News reported on June 16: China continuously holding of U.S. treasuries has finally stopped. Reporter was informed from United States Ministry of Finance website as of the end of April this year China’s holding of U.S. Treasury bonds was 763.5 billion U.S. dollars which is lower than end of March of 767.9 billion dollars. This means that China reduced about 4.4 billion dollars of U.S. Treasury bonds in April.
This is the first time in more than a year to reduce the U.S. government bonds. U.S. Treasury Department website’s nearly a year of data shows that since May 2008 China has increased about 260 billion dollars in U.S. bonds.
In fact, this past year and more, as China’s holding of U.S. treasuries increases, it sparked many debates on this issue worldwide. Some people feel that taking consider the risks of the possible devaluation, China should be careful about buy U.S. treasury bonds. However some says that the United States government bonds outside the reserve is still the best choice for investment.
In March this year, Secretary of State Administration of Foreign Exchange Hu Xiaolian (胡晓炼) said, to invest in the United States government bonds is an important part of China’s foreign exchange reserve plan. In the future China will continue to buy more U.S. bonds. At the same time China is highly concerned about the fluctuations of values in assets.
It is worth noting that recent foreign exchange bureau personal said, our country is ready if considered to be reasonable and profitable to buy no more than 50 billion U.S. dollars new bonds which International Monetary Fund (IMF) issued.
According to the media, Russian Central Bank said last Wednesday as part of its plans to sell part of U.S. bond and use foreign exchange earnings to buy bonds issued by the International Monetary Fund. Brazilian officials also announced the same day to purchase of bonds of IMF, the country also plans to sell U.S. Treasury bonds.
It is necessary to point out that China is not the only country reduced the United States bonds in April. Including Japan, Russia, Brazil and other countries also reduced a certain amount of U.S. Treasury bonds. The top five countries holders of U.S. Treasury bonds, only United Kingdom increased its holding by 24.6 billion.
However, China is still the largest holder of U.S. treasury bonds.
(Source: China Securities Journal. Author: 但有为)