Recent data shows that China has sold another $96.5 billionU.S. Treasuries, 7 consecutive months of ** has been held by ChinaU.S. Treasuriesto $769.7 billion. At the same time, US lawmakers proposed to confiscate the Chinese onesU.S. Treasuries, although it is not currently implemented, this possibility cannot be ignored. This article will be taken from China**U.S. TreasuriesReasonsU.S. TreasuriesThe growth of the scale and the proposal by U.S. lawmakers to confiscate China's U.S. debt and other aspects of analysis and **.
Although China**U.S. TreasuriesThe scale of the recent 7 consecutive months has attracted widespread attention. According to the latest data, China sold $96.5 billionU.S. Treasuries, bringing its total holdings down to $769.7 billion. The move reflects China's aggressive adjustmentForeign exchange reservesstructure, loweredU.S. TreasuriesDetermination of gravity. At the same time, China has also increased its holdings significantlyReservesto optimize the external storage structure and further ensureBalance of payments
China this time**U.S. TreasuriesThe reasons for this are twofold. First of allU.S. TreasuriesThe risk of rising yields. AlthoughU.S. TreasuriesIt has been one of the top choices for safe-haven assets in the world, but the last 10 yearsU.S. TreasuriesYields soared to around 5%, triggering a rush from many overseas countriesU.S. Treasuriesof the current. In order to avoid this risk, China has opted**U.S. Treasuries, moving on to other, more profitable investments. Secondly, China passed **U.S. TreasuriesOptimizationForeign exchange reservesstructure, loweredU.S. TreasuriesProportion of external reserves. In recent years, the People's Bank of China has continuously increased its holdingsReserves, as of the end of November this year,Reservesreached 2226 tons, an increase of 118 tons. **It is favored as a safe-haven asset and a highly liquid asset, which has a positive effect on stabilizing the external reserve structure.
The counterpart to China's ** is beautyTreasury bondsThe scale of the business continues to grow. As of now,U.S. TreasuriesThe total has already reached 3393 trillion US dollars, which will break through the 34 trillion mark in a few days. It means beautyTreasury bondsThe share of business in GDP has climbed to as much as 133%.DebtThe pressure is mounting.
BeautyTreasury bondsThe momentum of the soaring scale of business is unstoppable. At the beginning of the year, beautyTreasury bondsOnly 31$4 trillion, which has increased by 2 to date$53 trillion. And according toDebtThe ceiling is expected to be raised by 2025, the United StatesTreasury bondsThere will be no restrictions on business expansion. Even after 2025, it will only need to be raised againDebtCeiling, beautyTreasury bondsThe expansion can continue, this way".DebtThe "ceiling" has become a non-existent thing.
withU.S. TreasuriesAs the total amount grows, so does the interest paid by the United States. Especially in the current high interest rate environment in the United StatesInterest expenseIt's even higher. According to the data, in fiscal year 2023U.S. TreasuriesInterest expenseIt is expected to reach $659 billion, and next year it is expected to approach a trillion dollars. And compared with the US fiscal revenue, there is obviously a serious funding gap. U.S. fiscal revenue for fiscal year 2023 is 4$4 trillion, while total spending is more than $6 trillionFiscal deficitsIt is expected to rise to 17 trillion dollars. In addition, the United States has 8 trillion dollarsU.S. Treasurieswill mature in the short term, and the risk of a tsunami of U.S. debt is growing.
FaceU.S. TreasuriesAs the scale continues to expand, U.S. lawmakers have proposed the seizure of ChinaU.S. TreasuriesAlthough it has not yet been put into action, this possibility must be taken seriously. After all, no one can ** the future development, and no one can guarantee that the United States will not default or find ways to confiscate ChinaU.S. Treasuries
U.S. lawmakers proposed confiscating China's holdingsU.S. TreasuriesThe fact that the United States has frozen Russia's dollar assets proves that the United States dares to openly freeze the holdings of a country at the risk of destroying its own creditU.S. Treasuries。Although the economic and trade ties between China and the United States far exceed those between the United States and Russia, China's exports to the United States are still large, and China's high-quality and low-cost goods have a positive impact on the United States to reduce inflation. Moreover, China also holds more than $700 billionU.S. Treasuries, once China sells off massivelyU.S. Treasuries, will inevitably trigger a "butterfly effect" on the United StatesEconomyand the hegemony of the US dollar. Therefore, the United States must weigh the pros and cons when considering its own practical interests.
However, the financial game of "borrowing new to pay for the old" in the United States has gone wrong and needs to be repaidDebtMore and more,Fiscal deficitsIt is expected to rise to $2 trillion. Once the income cannot cover the expenses,Funding chainWhen the tipping point of the rupture comes, the United States may think more about where the "new money" will come from and whether the "old debt" really needs to be repaid.
China Continuous**U.S. Treasuriesthat will be heldU.S. TreasuriesThe drop to $769.7 billion reflects China's adjustmentForeign exchange reservesThe determination of the structure. And beautyTreasury bondsThe continuous expansion of the scale of the business led US congressmen to propose the confiscation of ChinaU.S. TreasuriesThe likelihood is increasing. However, both China and the United StatesEconomyThe complexity of the linkages and the relationship of mutual interests make the issue complex and complex. China-ownedU.S. TreasuriesAlthough the scale is large, China's exports to the United States are still important in the event of a massive sell-off in ChinaU.S. Treasuries, will be against the United StatesEconomyand the hegemony of the US dollar. Therefore, the United States needs to carefully handle its relations with China while considering its own practical interests.
To sum up, China**U.S. TreasuriesThe move is its adjustmentForeign exchange reservesPart of the structure, but also the faceU.S. TreasuriesThe risk of rising yields. And beautyTreasury bondsand the proposal of U.S. lawmakers to confiscate ChinaU.S. Treasuries, making the financial relationship between China and the United States complex and sensitive. in the futureEconomyChina and the United States need to work together to find solutions through cooperation and dialogue to safeguard their common interests.