China Remains Largest
Holder Of U.S. Treasury Securities
China remains the largest foreign holder of
U.S. Treasury securities as at the end of
December, the U.S. media reported on
Saturday.
The report quoted the new government data as
saying that China held 894.8 billion dollars
in Treasury securities at the end of
December, more than 755 billion dollars that
had been previously estimated.
But the new report also showed China trimmed
its holdings of U. S. debt by 34.2 billion
U.S. dollars in December.
The U.S. Treasury reported on Feb. 16 that
Japan surpassed China as the largest holder
of U.S. Treasury securities in December. But
the new estimate said Japan, now back in
second place, held 765.7 billion dollars in
December.
Japan had been the largest holder of U.S.
Treasury securities until China gained that
distinction in 2008.
"Purchase of Treasuries by China would
reflect only purchases by an entity in China
from an entity based in the U.S.," Stone &
McCarthy Research Associates said in a
recent client note.
"The Data would not pick up purchases done
on behalf of Chinese investors by dealers in
the U.K or Hong Kong, for example, nor would
it pick up purchases of Treasuries by
investors in China from investors based
outside of the U.S.," it added.
China defended its move to reduce its
holdings of U.S. Treasury securities, saying
the United States should take steps to
promote confidence in U.S. dollar .
Last week, when responding to questions on
China's sale of U.S. Treasury securities in
December, China's Foreign Ministry spokesman
Qin Gang said the issue should be viewed
from two perspectives.
He said on the one hand, China always
followed the principle of "ensuring safety,
liquidity and good value" in managing its
foreign exchange reserve. And when it came
to how much and when China buys the bonds,
the decision should be made taking into
account the market and China's need, so as
to realize rational deployment of China's
foreign exchange property, he said.
And on the other hand, the United States
should take concrete steps to beef up the
international market's confidence in the
U.S. dollar, Qin said.
The way to view the issue was similar to
doing business, he said.
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