U.S. TreasuriesIt is constantly climbing and is expected to break the record again next year. Currently,U.S. TreasuriesIt has reached 33$93 trillion, about to break the $34 trillion mark. At the same time, the GDP of the United States is $25 trillionTreasury bondsAs a share of GDP, it has climbed to 133%. This rapid growth of debt cannot be stopped, and the size of debt at the beginning of this year was 314 trillion dollars, which has increased by 2 billion today$53 trillion. Since the U.S. raises the debt ceiling by January 2025, there is no limit to debt expansion. And, even in 2025, debt expansion remains unlimited, as long as the debt ceiling continues to be raisedTreasury bondsThe business will continue to expand. However, this expansion has not come without a price, beautyTreasury bondsThe interest paid by the company is also increasing. In the current high-interest rate environment in the United States, interest expenses in fiscal 2023 are expected to reach $659 billion, which could approach a trillion dollars. In comparison, fiscal revenue is only 4$4 trillion, but the total expenditure is as high as more than $6 trillion, resulting inFiscal deficitsup to 17 trillion dollars. In addition, the United States faces $8 trillionU.S. TreasuriesThe issue expires in 1 year, which makes the beautyTreasury bondsThe tsunami became more severe.
China was the second largest overseas creditor of the United States for seven consecutive months**U.S. Treasuries, has sold $97.5 billionU.S. Treasuries, currently holding $769.7 billion. China's actions are for improvementForeign exchange reservesstructure, loweredU.S. TreasuriesInForeign exchange reservesand increased its holdings significantlyReservesto optimize the structure of external storage. According to the data, China's central bank has increased its holdings for 13 consecutive months, as of the end of November, our countryReservesIt reached 2,226 tons, an increase of 11 from October8 tons. As a safe-haven asset and highly liquid asset, it is favored by central banks, and China may continue to increase its holdings in the futurefor further improvementForeign exchange reservesStructure.
At present, China still holds $769.7 billionU.S. Treasuries, is the second largest overseas creditor of the United States. However, withU.S. TreasuriesAs a result of the expansion of the scale, some parliamentarians and experts have proposed freezing and confiscating China's holdingsU.S. Treasuries。While no such action has yet taken place, it is impossible to predict what the future will hold, and there is a precedent that the United States has frozen Russia's dollar assets. The economic and most complex economic ties between China and the United States are far more complex than those between the United States and Russia, and China's exports to the United States are huge, and China's high-quality and low-cost goods are beneficial to the United States to reduce inflation. In addition, China holds more than 700 billion yuanU.S. Treasuries, once China sells off sharplyU.S. TreasuriesIt is bound to trigger a "butterfly effect" and have a huge impact on the US economy and the hegemony of the US dollar. Therefore, the United States needs to weigh the issue of practical interests when considering such actions.
To sum up, in:U.S. TreasuriesIn the context of continuous expansion, China continues to increase the strategic measures of US debt and reserves. However, the proposal by US lawmakers to freeze China's holdings of US debt has also raised concerns. For China,**U.S. Treasuries, overweightIt's for improvementForeign exchange reservesstructure, reducing dependence on the US dollar. As for the United States, whether to confiscate or freeze China's holdingsU.S. TreasuriesThis is an issue that needs to be carefully considered, because it involves complex economic and trade ties and practical interests between China and the United States. After all, the actions of either side can trigger unavoidable consequences. As the situation develops, the financial relationship between China and the United States will continue to attract attention.