China Holdings of US Treasuries: A Global Perspective

China's holdings of US Treasuries have been a topic of interest for many years. As of 2020, China's holdings stood at $1.07 trillion.

The sheer size of China's holdings is a significant indicator of the country's reliance on the US dollar. This is partly due to China's large trade deficit with the US, which has led to a significant accumulation of US debt.

In 2011, China surpassed Japan as the largest foreign holder of US Treasuries. This milestone marked a shift in the global economic landscape, with China emerging as a major player in international finance.

China's holdings of US Treasuries have been steadily increasing over the years, with a notable surge during the 2008 financial crisis.

China's holdings of US Treasuries have been making headlines lately, and for good reason.

In the first quarter, China sold a record amount of US$53.3 billion of Treasuries and agency bonds combined. This is a significant move, considering the tensions between the two economies.

China's investments in the US are garnering renewed investor attention, and it's clear why: the country is diversifying its assets. Beijing offloaded a total of US$53.3 billion of Treasuries and agency bonds in the first quarter.

The data suggests that China is shifting its focus away from US dollar holdings. As Stephen Chiu, chief Asia foreign-exchange and rates strategist at Bloomberg Intelligence, noted, "As China is selling both despite the fact that we are closer to a Fed rate-cut cycle, there should be a clear intention of diversifying away from US dollar holdings."

China's gold holdings have actually increased in its official reserves, rising to 4.9% in April. This is a notable trend, especially when compared to other countries.

Countries with close ties to China, such as Belgium, have also been increasing their gold holdings in foreign-exchange reserves. In fact, Belgium disposed of US$22 billion of Treasuries during the first quarter.

Gold purchases by some central banks may have been driven by concerns about sanctions risk, according to Gita Gopinath, first deputy managing director of the International Monetary Fund.