Will China stop buying American T-bills?

Business & Technology

Bloomberg reports: “China added to bond investors’ jitters on Wednesday as traders braced for what they feared could be the end of a three-decade bull market.” The source of the jitters, according to “people familiar with the matter,” is that senior Chinese government officials “reviewing the nation’s foreign-exchange holdings have recommended slowing or halting purchases of U.S. Treasuries.”

  • China holds $3.1 trillion in foreign-exchange reserves, and “regularly assesses its strategy for investing them.” Bloomberg says it is not clear “whether the recommendations of the officials have been adopted.”
  • Other assets may offer more attractive returns, and Sino-U.S. trade frictions are another factor, as well as a long-held desire in China to diversify away from T-bills, as they are also called.

Some opinions on China’s appetite for T-bills worth reading: