According to data released by the U.S. Treasury Department, China again ** US debt in October, with a limit of $8.5 billion, bringing its holdings of US debt to the lowest level since 2009 at only $769.6 billion. At the same time, the United Kingdom and Japan began to increase their holdings of US debt, increasing their holdings by $24.1 billion and $11.8 billion, respectively. This move has led to the possibility that China could fall from the second largest creditor of the United States to the third largest creditor. However, due to the close ties between the UK and US economies, as well as the tension in Sino-US relations, China's attitude towards continuing to ** US debt has eased slightly.
The increase in holdings in the UK and Japan can be interpreted as a recognition of the credibility of the US dollar and the stability of US Treasuries. Although the UK and the US have close economic ties, the credibility of the US dollar is declining due to the unresolved economic problems in the US, which makes it necessary for the UK to increase its holdings of US debt to protect the stability of its own economy. At the same time, Japan has also begun to increase its holdings of US bonds, which can be seen as confidence in the economic strength of the United States and the US bond market. Although China still holds a relatively large amount of U.S. debt, if tensions continue to prevail, China may eventually lose its position as the second largest creditor.
China's continued behavior of US debt has become the norm, but the latest ** has been less powerful than in previous months. This shows that China has taken a more cautious and gradual approach in selling US bonds. There are two main reasons for the sell-off of U.S. bonds, one is for China's own economic development, and the other is for the response to Sino-US relations.
From the perspective of its own economic development, China's U.S. bonds are aimed at reducing dependence on the U.S. dollar and stabilizing the domestic economy. As China continues to promote the internationalization of the renminbi and the generalization of local currency transactions, U.S. bonds can reduce dependence on the U.S. dollar, improve the status and influence of the renminbi, and further promote the diversification and stable development of China's economy.
From the perspective of U.S.-China relations, U.S. debt can be seen as China's response to U.S. pressure and suppression of China in the economic field. Although the U.S. economic crackdown on China has not yet eased, China has reduced its dependence on the U.S. dollar through U.S. debt and reduced the impact of Sino-U.S. relations on its own economy. At the same time, increasing holdings** is also one of China's measures to stabilize the economy.
In addition to U.S. bonds, China has also continued to increase its reserves. According to data released by the State Administration of Foreign Exchange, China's ** reserves have grown steadily for 12 consecutive months and have become one of the world's largest ** buyers. This increase in holdings is one of the measures to stabilize China's economy.
*It is more stable and creditworthy than U.S. bonds, so it is important for economic stability. China's increased holdings** can improve the diversification of the country's asset structure, reduce its dependence on the US dollar and US debt, and further enhance financial security and resilience.
In addition, increasing holdings** is also one of China's measures to enhance its influence and position in the global economic landscape. As the global economy becomes more volatile and its status as a safe-haven asset continues to grow, China can play a more important role in the global economy by increasing its holdings.
In the current global economic situation, selling US bonds remains an important option. For a long time, the United States has relied on the hegemony of the dollar to contain other countries and impose economic burdens on emerging countries at a critical stage of the global economic recovery. Therefore, not only China, but most countries that aspire to stable development want a more stable trading currency.
The internationalization of the renminbi and local currency trading is an inevitable choice, and it is an action that China needs to take in order to promote the stable development of the global economy. With the accumulation of problems in the U.S. economy and the decline in the stability of the U.S. dollar, the strengthening of the internationalization of the renminbi, and the promotion of local currency transactions have become critical.
In short, China's continued efforts to increase its holdings of U.S. debt and promote the internationalization of the renminbi are aimed at protecting the stability and development of its own economy, as well as the stability of the global economy. Against the backdrop of global economic instability, China, as the world's second largest economy, has the responsibility and ability to shoulder the heavy responsibility of leading and promoting global economic development. By increasing its holdings of U.S. bonds and promoting local currency transactions, China will further strengthen its financial security and influence and drive the global economy towards a more stable and sustainable direction.