US Treasury data shows China dumping US debt

China is getting rid of its US debt—data from the US Treasury

Beijing’s stock of US securities is at its lowest level since May 2009.

The US Treasury released data on Wednesday that showed China’s holdings of US Treasury securities fell to $859.4 billion in January, down from $867.1 billion in December. This is because of the growing threat of economic sanctions from the US government.

The drop in January was more than twice as big as the drop in December, which was $3.1 billion. However, the drop in November, which was $7.8 billion, was bigger.

China is the second-largest foreign holder of US government debt. For six months in a row, China has cut the amount of US debt it owns, and in April 2022, the amount fell below the symbolic $1 trillion mark.

Moving Markets

The South China Morning Post says that Beijing is trying to diversify its investments and become less dependent on the US dollar while promoting the wider use of the yuan around the world in order to avoid sanctions. This is why investments are going down.

Zhang Ming, deputy director of the Department of International Finance at the Institute of Finance and Banking, told the SCMP that China has already cut its holdings by 34.1% over the past ten years. Based on US data, China will cut its holdings by 16.6% in 2022.

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