China sells off significant US treasury holdings – $174 bn drop seen in a year

Beijing/ Washington – In the background of the sanctions imposed by the US and the increase in interest rates, it is coming to light that China has sold a large amount of US bonds. In January 2022, US debt securities were equal to $1.03 trillion. By the end of January 2023, the value of US bonds in China’s foreign reserves has fallen to $859 billion. This has been the lowest in the last 13 years.

Moreover, it has come to light that China has sold more than $18 billion of debt securities in the last three months. In November, China sold $7.8 billion worth of debt securities. After that, three billion dollars worth of bonds were sold in December and worth $7.5 billion in January. It seems China has decided to continue the selling policy that started last year by selling more than seven billion dollars of debt securities at the beginning of the new year. Even in 2022, China sold more than $165 billion in US bonds. In the 12 months from January 2022 to 2023, China’s foreign reserves reduced US debt by $174 billion. Earlier in 2010, the value of US bonds in China fell below $900 billion. It is said that issues such as the Russia-Ukraine conflict, the Taiwan issue and the ongoing action against Chinese companies by the US are behind this continuous sale from China. In the wake of the Russia-Ukraine conflict, Western countries, including the United States, it has imposed massive sanctions on Russia. It also targeted Russia’s foreign reserves. More than 50 percent of Russia’s foreign reserves are currently tied up due to sanctions.

The Communist regime of China fears that if the Sino-Taiwan conflict flares up, the United States and Western countries may also target their foreign reserves. Therefore, it seems that China is taking steps to reduce the amount of US dollars in a phased manner. The United States has been blacklisting Chinese companies for the past year. Therefore, there is a strong resentment in the Chinese regime, and Chinese leaders and officials demand that the United States be retaliated against.

Even during the trade war waged against China by former US President Donald Trump, there was a demand from China to target US bonds and investments. Considering this background, China’s ongoing sale of debt securities is noteworthy. China’s foreign reserves are currently more than three trillion dollars, of which nearly 60 percent is in US dollars.

Meanwhile, China is also making efforts to increase the use of the local currency, the Yuan, and to establish this currency as an international reserve currency. For this, it has been revealed that China is emphasizing the use of the Yuan in trade agreements and currency transactions with many countries and is taking steps to reduce the use of the US dollar.

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