Chinese experts expected that China will gradually reduce its holdings of US Treasury bonds and notes, in light of the deterioration of relations between China and the United States on several issues, including the Corona virus, trade and technology.
According to Reuters, financial markets are increasingly concerned about whether China will sell the US government debt it holds as a weapon to counter the growing US pressure.
The state-backed Chinese Global Times quoted Shi Jin Yang, a professor at Shanghai University of Finance and Economics, on Thursday as saying China will gradually reduce its holdings of US debt to about $ 800 billion. Under normal conditions, no detailed timeframe was mentioned.
he added, but of course, China might sell all of its US bonds in an extreme case, such as a military conflict.
China, the second largest non-US holder of US Treasury instruments, owns $ 1.074 trillion in instruments in June, down from 1.083 trillion the previous month according to the latest official data. .
China has been steadily reducing its holdings of US bonds since the beginning of this year. However, some market observers suspect that China may not necessarily sell US Treasury instruments as it You might use other custodians to buy Treasury bonds.
a reduction to $ 800 billion from the current level could mean more than 25 percent shrinkage of its holdings.
Analysts say a large-scale Chinese sell-off, often referred to as the nuclear option, could trigger turmoil in global financial markets.
and the government newspaper pointed to another reason for the sale, which is the potential risk of default in the United States, as the debt of the largest economy in the world rose sharply to about the same size of GDP, which is An unprecedented level since World War II and far above the internationally recognized safety line of 60 percent.
China is strongly exposed to the US dollar and its denominated assets. China's official foreign reserves stood at $ 3.154 trillion at the end of July.
(Amazon fun knowledge)
