China holds a high of US$1.317 trillion in US debt

According to Sing Tao Global Network, China continues to increase its holdings of US Treasury bonds. At present, China’s total holdings of US Treasury bonds have reached 1.317 trillion US dollars, and its status as the largest “creditor” in the United States has been consolidated.

The report said that on the 16th, the US Treasury Department announced the latest issue of international capital flow report. In November 2013, China increased its holdings of US Treasury bonds by US$12.2 billion, and the total amount increased to US$1.317 trillion, a record high. Followed by the "two creditors" Japan increased its holdings of 12 billion US dollars, holding the total amount of US debt increased to 1.186 trillion US dollars.

On the eve of the release of the International Capital Flow Report, the US Treasury Department directed an "Oolong Finger" yesterday. The data originally scheduled to be released at 10 pm on the 16th Beijing time was published in the official website of the Ministry of Finance. A US Treasury spokesman explained: "Operational errors caused some data to leak on the website in advance, and we immediately deleted the data after discovery."

However, the operational errors did not affect the accuracy of the relevant data, and the data leaked in advance was consistent with the officially announced announcement values, and did not have a significant impact.

The report shows that although China and Japan continue to increase their holdings of US Treasury bonds, the US Treasury bond market remained in a net outflow of funds last November. In November last year, the net outflow of US long-term government bond investment funds was $29.3 billion, while the revised amount in December was a net inflow of $28.7 billion. The US Treasury bond market had a net international capital outflow of US$16.6 billion in November last year, and the revised amount in December was a net inflow of US$188.1 billion.

Regarding China’s increase in holdings of US Treasury bonds, market analysts said that China’s increase in holding US Treasury bonds is only a helpless choice. The increase in US Treasury bonds is mainly considered from the perspective of security and liquidity. Yuan Zhigang, dean of the School of Economics of Fudan University, told the reporter of China Business News that the United States has begun to gradually reduce the scale of quantitative easing. This year, US interest rates and government bond yields will all show an upward trend. Therefore, China’s current increase in US Treasury bonds is also considered strategically.

In October last year, U.S. Treasury bonds once again reached the statutory ceiling. Since then, the U.S. government has once fallen into a financial deadlock and the risk of debt default has risen sharply. The Chinese government also urged the US government to rationalize the financial situation and protect the value of the national debt. After all, China, as the largest holder of US Treasury bonds, will have a huge impact on China’s vital interests if the yield of Treasury bonds fluctuates drastically.

Gao Xiqing, former vice chairman of China Securities Regulatory Commission and general manager of China Investment Regulatory Commission, said that the relatively stable income of finance comes from investing in “quality products”. Compared with national debts in Europe and other places, US Treasury bonds are still the best today. Relatively safe and stable, we still need to purchase US Treasury bonds to ensure the relative security of investment.

At present, China's foreign exchange reserves rank first in the world. On January 15, the People's Bank of China [microblogging] released data showing that in 2013, the national foreign exchange reserves increased by 509.7 billion US dollars compared with the end of 2012, the total amount rose to 3.82 trillion US dollars, the national foreign exchange reserve balance and annual growth rate reached a record high. .

The high foreign exchange reserves are mainly derived from the accumulation of national surpluses. Yi Gang, director of the State Administration of Foreign Exchange, previously wrote that the implementation of quantitative easing monetary policy in developed countries has intensified the “double surplus” of China's current account and capital projects. When foreign exchange funds flow in large amounts, banks, enterprises and residents are reluctant to hold foreign exchange, and they are sold to the central bank in the market, resulting in an increase in foreign exchange reserves.

Yuan Zhigang believes that as far as the current situation is concerned, the total foreign exchange reserves of 3.82 trillion US dollars have exceeded the normal range. Such high foreign exchange reserves are also facing the risk of fluctuations in the yield of US Treasury bonds, and now the state's capital assumptions on foreign exchange in the Free Trade Zone will alleviate this trend to some extent. This will also achieve the purpose of “hiding in the people and collecting in the enterprise”.

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