China dumps US Treasuries for fifth consecutive month, sending holdings to lowest level since February 2017

Name: RCEP: 15 Asia-Pacific countries sign world’s largest free-trade deal
Uploaded: 2020-11-19T13:00:15.000Z
Duration: 3 min 29 s
Description: RCEP: 15 Asia-Pacific countries sign world’s largest free-trade deal

China’s US Treasury holdings fell to the lowest level since February 2017, at the same time as tensions between the two nations continued to ratchet up

China’s spending spree on Japanese government bonds continued, up 73 per cent over the first nine months of 2020 compared to a year earlier

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China sold US$6.22 million of US Treasury securities in September, lowering its total holdings to US$1.062 billion, according to the latest monthly Treasury International Capital (TIC) report from the US Department of the Treasury. Photo: Shutterstock

Karen Yeung

Published: 9:00pm, 19 Nov 2020Updated: 8:46am, 20 Nov 2020

China’s holdings of US government debt have fallen to their lowest level since February 2017, following a fifth successive month of net US Treasury sales in September, according to a US government report.

China sold US$6.22 billion of US Treasury securities in September, lowering its total holdings to US$1.062 trillion, according to the latest monthly Treasury International Capital (TIC) report from the US Department of the Treasury.

Analysts cautioned that the reduction in China’s US Treasury holdings was not necessarily a sign it was reducing its overall US dollar-denominated securities holdings, since it could buy other assets such as stocks or corporate bonds instead.

Nevertheless, while reducing its holdings of US debt, China has been on a buying spree of Japanese government bonds this year.

03:29

RCEP: 15 Asia-Pacific countries sign world’s largest free-trade deal

According to data from the Japanese Ministry of Finance, China snapped up 27.7 billion yen (US$2.7 billion) worth of Japanese debt in September, resulting in 2.4 trillion yen of purchases over the first nine months in the year, up 73 per cent from the same period in 2019.

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