Tags: Treasury | China | Sheds | US | Short Term | T–Bills

Treasury Data: China Dumps Short-Term US T–Bills

Monday, 06 Jun 2011 08:34 AM

China is slashing its holdings in short-term U.S. Treasury bills, cutting its ownership in such securities to $5.7 billion in March 2011 from a recent peak of $210.4 billion in May 2009, according to U.S. Treasury data.

The Chinese, meanwhile, have been replacing those holdings with longer-term U.S. government debt, but that trend took a breather around October of last year, when the Asian giant began to buy less and less Treasuries regardless of maturity, CNS News reports.

The Chinese want less to do with U.S. government debt in an effort to shift to other foreign-exchange holdings.

“We have lent a massive amount of capital to the United States, and of course we are concerned about the security of our assets,” Chinese Premier Wen Jiabao said in March 2009 after Obama signed his $787 billion stimulus package into law.

Chinese-Premier-Wen-Jiabao200getty.jpg
Chinese Premier Wen Jiabao
(Getty Images photo)
“To speak truthfully, I do indeed have some worries.”

Other senior Chinese economic officials expressed similar concern thanks to gaping deficits and a Federal Reserve $600 billion bond buyback program, known as quantitative easing, designed to pump up the economy and with it, unemployment rates.

Market experts aren’t too worried China is going to seriously disrupt the global financial system.

China may “gradually cut its U.S. Treasurys as it seeks to diversify its foreign-exchange holdings,” says Yao Wei, a Hong Kong-based economist with Societe Generale, according to Bloomberg.

As of March of this year, the Asian nation owned $1.145 trillion of U.S. debt, down $9 billion from the previous month, according to U.S. Treasury data.

Still, the figure is much higher than the $895 billion from March of 2010 and well above the $400 billion in August of 2007.

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China is slashing its holdings in short-term U.S. Treasury bills, cutting its ownership in such securities to $5.7 billion in March 2011 from a recent peak of $210.4 billion in May 2009, according to U.S. Treasury data. The Chinese, meanwhile, have been replacing those...
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2011-34-06
Monday, 06 Jun 2011 08:34 AM
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