Bloomberg reported on February 11: "Chinese regulators have advised banks to reduce and control their holdings of U.S. Treasury bonds. As the largest overseas holder of U.S. Treasuries, China has cut its holdings by nearly half since 2013, and this move is a continuation of a long-term trend. The action has raised concerns in the market about global reductions in U.S. Treasury holdings, with worries that Europe and Japan may follow suit."
The trend of selling U.S. Treasuries will continue. The only things China can buy from the United States are soybeans and chips, but the U.S. has repeatedly imposed restrictions to prevent us from purchasing them. What use is holding U.S. Treasuries? High returns come with high risks. The creditworthiness of U.S. Treasuries has long been compromised. The U.S. debt is expected to exceed $39 trillion, and Moody's has already downgraded the U.S. credit rating.
[Cunning] China's continuous reduction of U.S. Treasury holdings essentially means taking risks early and seeking safe assets. Three major institutions, including Moody's, have successively downgraded the U.S. credit rating, significantly reducing the credibility of U.S. Treasuries. In addition, the U.S. has long restricted chips and limited high-tech exports, leaving few quality assets for China to purchase. The returns and risks of holding U.S. Treasuries are completely mismatched.
History has proven that maintaining hegemony through excessive debt issuance is unsustainable, and the global de-dollarization trend is inevitable. Rational reduction and diversified investment are not only essential for safeguarding foreign exchange reserves but also an inevitable choice in response to changes in the international financial landscape!
Original article: toutiao.com/article/1856812754558023/
Statement: This article represents the views of the author alone.