China’s possessions of US Treasury bonds have fallen to its lowest level since 2009, while Beijing maintains more US government bonds through less important accounts and the diversity of its investments in alternative assets.
Data published by the US Treasury on Tuesday showed that the value of the American sovereign debt kept by Chinese investors decreased by $ 57 billion to 759 billion in 2024, not including Chinese -owned treasury bonds in other countries.
Analysts say that change partially reflects China’s desire to diversify its foreign reserves by purchasing assets such as gold, but they add that Beijing seeks to hide the value of its possessions from the treasury bonds by converting it into accounts registered in other places.
risk
The Financial Times quoted Brad Setser – a prominent colleague of the Council of Foreign Relations and a former official at the US Treasury – as saying. “.
He will be pleased that the decrease in China’s possessions may have been exaggerated due to the transfer of some assets to the deposit of securities such as the Belgium -based eurokller, Clarsterim, based in Luxembourg, which would enhance the possessions of these countries in official data.
“It has become difficult over time to track what China does and how Chinese flows affect global markets,” he said.
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The transformations in the ownership of foreigners are subject to tank bonds to accurate monitoring due to the need for the US government to finance a huge budget deficit at a time when its central bank works to reduce its possessions from government debt.
China’s declared bodies of treasury bonds decreased by about 550 billion dollars since it reached its peak in 2011, and Britain’s possessions rose 34.2 billion dollars in 2024 to 722.7 billion, while Belgium’s possessions increased 60.2 billion dollars to 374.6 billion dollars, and Luxembourg’s possessions grew 84 billion A dollar to 424 billion dollars, and Japan remains the largest pregnant with more than A trillion dollars.
It is estimated that the total biases of foreigners from US Treasury bonds exceeded $ 8.5 trillion for the first time in August 2024, reflecting the continuous confidence in the American economy.
US Treasury bonds are an attractive investment tool for many countries due to their stability and guaranteed returns, which contributes to enhancing foreign exchange reserves for these countries.
The British newspaper quoted a source familiar with the administration of foreign reserves – it was not named – as saying, “Not all the American treasury bonds that China maintains are directly present in American institutions,” as Beijing maintains part of its reserve assets through entities such as Eurosleer or Clerester. ” Diversification of risks. “
“However, the total number of China’s US treasury bonds will decrease slowly, and the direction is clear, as China continues to diversify its reserve assets.”
Towards gold
The head of the official monetary and financial institutions forum in the United States, Mark Souble, said that the Chinese People’s Bank (the Central Bank) was increasing its exposure to other assets such as gold, which is usually seen as a haven in times of economic and market pressures.
The price of alloys has jumped about 12% so far this year, indicating the increase in demand among senior buyers, and data from the World Gold Council showed that China was the third largest gold buyer in the last three months of 2024, adding 15.24 tons to its reserves.
However, while the Chinese People’s Bank of Gold’s possessions have jumped 13% over the past two years, alloys are still a relatively small part of the total bank’s reserves.
Suppbled said that the decrease in treasury possessions does not necessarily mean that China sells the dollar assets in general, and analysts say that Beijing has increased its purchases of other safe American debts such as agencies, and changes in the value of Chinese treasury possesses fluctuations in the market value of bonds.
Analysts said that the jump in Britain’s possessions of treasury bonds was driven by the flow of money from foreign sovereign wealth funds, wealthy families and hedge funds across London, in a dynamic similar to what happened in Belgium.
And given that the revenues on government bonds are higher than those on treasury bonds, it is not likely that the treasury bonds in Britain are British investors, but “it comes to foreign funds, including Middle East fund “Nat Anens”.
