First published2023-12-12 17:30 The article is 2100 words in total, and it is expected to take about 7 minutes.
China's foreign reserves easily crushed the United States!
In the latest data, China's foreign exchange reserves have surged by $70.6 billion.
This data is equivalent to 500 billion yuan.
And that's just a month's mark.
Let's look at the United States.
In the past three months, the United States has been desperately suppressing the exchange rates of other currencies, and China's foreign exchange reserves have fallen for three consecutive months. The United States also got its wish for three months.
But after three consecutive months of gains, the U.S. foreign reserves began to rise in November, on the contrary, China's began to rise.
This rise or fall may seem inconsequential, but our rise is so large that it directly erases the three-month record of the United States.
This can make the United States angry enough.
At present, the United States is facing a serious inflation problem at home, and many countries are constantly selling US bonds to the outside world, and the United States has little hope of victory in this financial war.
Therefore, the United States is worried.
Let's start with ourselves.
China's foreign exchange reserves have soared
The most direct impact of the sharp rise in foreign exchange reserves is to stabilize the RMB exchange rate.
The growth of China's foreign exchange reserves means that China has intervened more in the foreign exchange market, which is very useful for stabilizing the renminbi exchange rate. In the short term, the RMB exchange rate may come under some pressure, but with the increase in China's external reserves, the RMB exchange rate will be more stable and less volatile.
Another important point is to increase China's voice in the international market.
Foreign exchange reserves are a manifestation of a country's economic strength and a symbol of its international status. With the growth of China's foreign exchange reserves, China's voice in the international market will also be enhanced. This will not only help enhance China's status in international economic affairs, but also help enhance China's international influence.
Finally, and most importantly, foreign exchange reserves are very beneficial for economic growth.
The growth of foreign exchange reserves means that China has more money to invest and spend. These funds can be used for infrastructure construction, education, medical care and other fields to promote the growth and development of the domestic economy. At the same time, these funds can also be used for foreign investment to promote the international development of Chinese enterprises.
In short, the sharp rise in China's foreign exchange reserves is certainly beneficial to China, but for the United States, it is not so exciting.
In the past, China's foreign reserves soared, and the United States could still reap a little benefit, because China's foreign reserves rose and when they got the money, they had more capital to buy US bonds, and finally the funds went into the pockets of the United States.
But now, unlike in the past, China is not buying US bonds at all, and not only are we not buying them, but we are also frantically selling US bonds.
Why did China sell U.S. bonds and buy **?
To reduce investment risk, of course.
It is visible to the naked eye that the US economy is starting to have problems, and it is a serious problem.
So not only China, but all countries around the world are selling US bonds as much as possible.
One of the big reasons why China is selling US bonds aggressively and then buying** is to enhance financial security.
U.S. bonds are an important part of China's foreign exchange reserves, but with the escalation of friction between China and the United States, the risk of U.S. bonds is gradually increasing. As a result, China has begun to look for other ways to invest to reduce risk and enhance financial security. As a relatively stable asset, it can help China reduce risks and enhance financial security.
There is also a special point, which is to deal with the friction of the **.
The escalation of friction between China and the United States has made China begin to consider adjusting the composition of its foreign exchange reserves. U.S. bonds are an important part of China's foreign exchange reserves, but the escalation of friction between China and the United States has led China to consider reducing its holdings of U.S. bonds.
As a result, China began to sell US bonds aggressively to reduce the impact of friction on its foreign exchange reserves.
Of course, buying ** is also to seek diversification.
The growth of China's foreign exchange reserves has made it necessary for China to diversify its investments to reduce risks. **As an important safe-haven asset, it has become one of the important investment directions of China's foreign exchange reserves.
The value of *is mainly determined by supply and demand and inflation, and it is a relatively stable way to invest. Therefore, it can be seen that when China is selling US bonds aggressively, it is also having a large amount of reserves**.
Chinese combo punches
Aggressive sell-off of U.S. Treasuries and massive purchases**. It's a strategic choice, but it's also sending a signal.
A signal of the end of dollar hegemony.
As the most powerful country during World War II, the United States established a fixed exchange rate system pegged to the U.S. dollar through the Bretton Woods system, making the U.S. dollar the world's most important reserve currency.
This position gives the United States a dominant position in the global economy and can influence the global economy through monetary and fiscal policy.
Global transactions, especially commodities, are typically denominated and settled in US dollars. This allows the United States to influence the global economy through monetary and fiscal policy.
At the same time, the United States uses monetary and fiscal policies to affect the liquidity and volume of global currencies, and ultimately achieve the purpose of influencing the global economy.
In short, relying on the dollar hegemony system established by itself, the United States has been imposing its own financial crisis on other countries for many years, in an attempt to control the global economic circulation by itself and achieve the goal of world hegemony through the dollar.
China's combination is sending a signal to the outside world that the hegemony of the dollar is gradually declining.
The United States has made too many enemies, and in the past few years, many countries have been trying to break the hegemonic system of dollar settlement and establish a settlement system for their own national currency.
It can only be said that the financial sanctions imposed by the United States on Russia in the Russian-Ukrainian war have allowed Russia to prove the fragility of the dollar hegemony, and it has also made Russia prove that the dollar hegemony is gradually dying out.
In this incident, the United States lifted a brick and smashed itself in the foot.
Naturally, China saw it.
We are also seeking the status of the RMB in the international community, and **, the world's common currency before the emergence of US dollar hegemony, is a strong support for the establishment of the RMB settlement system.
So when we were selling US bonds on a massive scale, we bought aggressively.
This is to say goodbye to the hegemony of the US dollar, and it is also to plan for the future development of the yuan.
Judging from the current situation, China's combination has worked very well, China's foreign reserves have risen sharply, the dollar has begun to rise, and the credibility and status of the RMB are bound to be improved.
As a trend, this is just the beginning.
Can the U.S. economy cross this hurdle?We do not know, but the decline of the hegemony of the dollar will be a historical inevitability.
What are your thoughts on this?See you in the comments!