China Sells Record Sum of US Debt Amid Signs of Diversification
China Sells Record Sum of US Debt Amid Signs of Diversification
China sold a record amount of Treasury and US agency bonds in the first quarter, highlighting the Asian nation’s move to diversify away from American assets as trade tensions persist.
China sold a record $53.3 billion of US Treasury and agency bonds in the first quarter of 2024, likely due to escalating trade tensions and a desire to diversify its assets. This move is raising concerns as China is a major holder of US debt and its actions could impact the US economy. Additionally, China has been increasing its gold reserves, potentially as a way to mitigate sanctions risk.
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Yeah they're dumping bad investments. Its definitely time to cash out on the US.
The market can stay irrational longer than you can stay solvent. And you're not going to get the markets to give uo wholesale on the notion of the USA any time soon.
No. Not until dedollarization i imagine. I'm not expecting it anytime soon, but it is sound for China to sell off US debt now while its still worth something
The market can stay irrational longer than you can stay solvent but Elon dumping Tesla stock matters because he owns an enormous fraction of it.
When you’re talking about holdings of US debt the size that China holds, they are the market.
Okay but they aren't. They're diversifying the portfolio, not dumping all their US bonds. But even were they to do so, they're not the market. Leaving aside that foreign governments like China aren't majority holders of US debt even if you add them all up, China is the second largest holder of US debt not #1 (And the UK plus any of the next like 5 other foreign government owners adds up to China)
If China were to dump us debt that would be significant, but let's not venture into the non factual
Yeah ok so it’s $50bn not a liquidation, sure, but that’s not spare change in anyone’s language.
If the 2nd largest holder of US debt starts selling TENS OF BILLIONS of dollars of that debt, that’s notable.
Sure it’s like 5% of their total holdings or something like that but they’re a major player and that’s a major stake. Pretending this is equivalent to some Reddit bro using Robin Hood is asinine.
China selling this stake isn’t following or responding to the market. It’s defining the market.
No. What's asinine is pretending that China is engaging in some sort of 4d chess move to dedollarize by selling off the majority stake in the US, when what theyre actually doing is diversifying their investment portfolio by selling a stake in US bonds equivalent to like 15% of Luxembourgs holdings or 5% of their own holdings and investing in other securities.
You compared this to Elon Musk dumping his tesla stocks. It's just not.