U.S. Treasury Department released the latest figures show that in December 2009, the Chinese holdings of 34.2 billion U.S. dollars the U.S. treasury bonds, reducing as much as 4%, currently holds 755.4 billion U.S. dollars. This is the second in November reduction of 9.3 billion U.S. dollars the U.S. treasury bonds, the Chinese government for the second consecutive month reduction operation, and the reduction of the size of the expansion Xun. In this regard, relevant experts said that with the U.S. bond yields continued to rise, China, or will continue to holdings of U.S. Treasury bonds.
"Seizing the correct time window"
Official data showed that as at the end of December last year, China's holdings of U.S. Treasuries from a peak in May last year, 801.5 billion U.S. dollars fell to 755.4 billion U.S. dollars. Britain holds a total 302.5 billion U.S. dollars, Hong Kong China for the 152.9 billion U.S. dollars, compared with the end of 2008 at least doubled. Most experts believe that "the Chinese government to seize the right time window", foreign savings to adjust the investment structure will replace the United States government bonds into U.S. dollars to achieve value-added goals.
In the United States Treasury Department released statistics, in addition to SAFE's foreign exchange reserves investment, but also China's financial institutions to hold the number of U.S. Treasury bonds.
"Since the second half of 2009, the international market uncertainty is still large, strong demand for the domestic foreign exchange loans and foreign exchange liquidity tightening, some financial institutions will repatriate foreign exchange funds from overseas for domestic use, which also caused China to reduce debt held by the United States . "Lu political commissar, chief economist at Industrial Bank said.
From the central bank data showed, as at the end of 2009, 12 foreign currency loans of financial institutions totaled 379.9 billion U.S. dollars, an increase of 55.96%. The annual foreign currency loans increased by 136.2 billion U.S. dollars, up by 110.5 billion U.S. dollars more.
Is a Chinese investor appetite for U.S. Treasury bonds are becoming smaller and smaller do? Is not true. Data show that from last year's holdings reached a peak in May to December, China's holdings of short term U.S. Treasury bonds fell 140.7 billion U.S. dollars, decreased by 67%. Over the same period, the new long-term bonds more than 100 billion U.S. dollars.
"This is largely due to maturity of the bonds, rather than take the initiative to sell." Lu political commissar of the opinion that "underweight" as the "reduced" seems more appropriate.
In December last year, the data show that China's continued holdings of short-term U.S. Treasury bonds, 38.8 billion U.S. dollars to reduce the month, while holdings of long-term debt 4.6 billion. According to informed sources, China is in fact still continue to buy more than one year maturity of U.S. Treasury bonds.
Of the Central University of Finance and Director of the China Banking Research Center, Guo Tian Yong also pointed out that the U.S. Treasury official data can only show that the Chinese investors to directly hold the size of U.S. Treasury bonds, and does not include China through a proxy way in China, Hong Kong and London and other financial centers the number of indirect holding of U.S. treasuries and therefore can not accurately reflect the adjustment of China's foreign reserve investment in a comprehensive picture.
Accelerate diversification of foreign currency assets
From public data, in 2009 the year of China to the United States conducted a total of 5 times debt reduction operations. In addition to in November, in December, the other three times were made in April, June and August, reducing the amount of 4.4 billion U.S. dollars, respectively, 25.1 billion U.S. dollars and 34 billion dollars. Among them, in August of the holdings of making China the number of holders of U.S. Treasury bonds fell below 800 billion U.S. dollars juncture, Chinese holdings of U.S. treasuries basically hovering in the vicinity of 798.9 billion U.S. dollars.
"SAFE is doing to prepare multi-investment, and gradually implemented." Director of the Chinese Academy of Social Sciences Research Center of Chinese entrepreneurs, said Lee Chung-min.
Chinese Academy of Social Sciences Institute of World Economics and Politics Zhang Ming, deputy director of the International Monetary newly released research report pointed out that Chinese investors have begun to lower incremental foreign exchange assets in the proportion of dollar-denominated assets.
In 2009 China will increase its foreign exchange reserves 453.2 billion U.S. dollars, but the same period, Chinese investors overweight the U.S. Treasury 28 billion U.S. dollars, holdings of U.S. agency debt 24.7 billion U.S. dollars, holdings of U.S. corporate debt 4.1 billion, holdings of U.S. stocks 4.1 billion U.S. dollars . The four asset classes as a whole, in 2009 only to Chinese investors increased holdings of assets of 3.3 billion U.S. dollars, accounting for less than 1% of China's foreign exchange reserves increment.
As with previous different from the recent political factors have become increasingly closely with the adjustment of China's foreign reserve investments linked up.
Lu political commissar of the analysis, the recent Sino-US diplomatic and economic relations continued to deteriorate, the U.S. backtracking behavior, so that the assets of China's security concerns in the United States to deepen and impart information and even to make the appropriate adjustment is entirely possible. My Government is fully able to consider the U.S. national debt as a bargaining chip to counter the U.S. trade protectionism, while the improvement of the RMB exchange rate formation mechanism and the necessary time to fight the initiative.
China will continue to holdings of U.S. Treasury bonds
In fact, the U.S. government heavily in debt, the U.S. Treasury is no longer "sit back and relax," the assets.
Although the United States Treasury Secretary Timothy Geithner has made it clear on many occasions that the U.S. budget deficit would return to a "sustainable" level up, but the U.S. President Barack Obama early in February to submit the 2010 budget report shows that the U.S. is now fiscal deficit was 1.56 trillion U.S. dollars, accounting for 10.6% of U.S. GDP. To this end, Geithner to be on the first two quarters of 2010, borrowing 660 billion U.S. dollars to fill the shortfall. The U.S. National balance sheet, as well as accounting for the United States GDP90% of the over 12 million in stock of debt.
In view of this, Goldman Sachs, JP Morgan Chase and other investment banks have predicted that in 2010 the U.S. 10-year government bonds yield 3.68 percent in the current basis, and further increased to 4.1%, which means the price of future long-term U.S. government bonds may also be continue to shrink.
"Right now the U.S. economy continued to recover, rising inflation and the Fed's interest rate trends, determine the mass buying at this time the future of the U.S. debt will face greater pressure to Fukui." Lu political commissar said, considering all aspects of the current situation, a month continue to "reduce" it is possible.
