China has dropped 97 percent of its holdings in U.S. Treasury bills, decreasing its ownership of the short-term U.S. government securities from a peak of $210.4 billion in May 2009 to $5.69 billion in March 2011, the most recent month reported by the U.S. Treasury.
Treasury bills are securities that mature in one year or less that are sold by the U.S. Treasury Department to fund the nation’s debt.
Mainland Chinese holdings of U.S. Treasury bills are reported in column 9 of the Treasury report linked here.
Until October, the Chinese were generally making up for their decreasing holdings in Treasury bills by increasing their holdings of longer-term U.S. Treasury securities. Thus, until October, China’s overall holdings of U.S. debt continued to increase.
Since October, however, China has also started to divest from longer-term U.S. Treasury securities. Thus, as reported by the Treasury Department, China’s ownership of the U.S. national debt has decreased in each of the last five months on record, including November, December, January, February and March.
The Fed is buying up those securities. If they weren’t, interest rates the federal government has to pay to borrow would already be much higher. The question in my mind is: what are the Chinese now buying *instead* of government debt? Just sitting on cash? Buying gold? Oil? Wheat?
@bbartlog: Simple summary is bbartlog…The Chinese may be many things…but they are not stupid! Since the Obamination has been in office the dollar has suffered a better than 30% loss in most of the world! The Chinese say “Man no know how to swim, no build house on ground sinking into water!”
The Chinese are buying Japanese Bonds. and some Chinese companies are buying up European businesses.
Russia has also been selling off US Bonds.
More: http://www.reuters.com/article/2010/02/09/us-china-usa-pla-idUSTRE6183KG20100209
@bbartlog: Just so you will know the Chinese (Hong Kong) have built an enormous securities safe keeping warehouse facility at their Airport. It is said to be one of the largest in the world. You can easily move Gold there…however good luck in moving it out of there….in fact most Gold that is moved from the Asian countries is only done so after Hallmark expiration and even then it is difficult art best! What the Chinese are utilizing funds for more than anything is Silver….the increases we are seeing in Silver value is partially being caused by their buying! As Gold increases in value it will become less applicable to use as a conductor in high tech electronics, Silver Chromium will be the super conductor of the future and the Chinese aim at controlling it! Our Government is as well trying to hide their alliances in their unholy trinity with the Chinese that actually started in the Clinton administration and has been largely advanced during the Obama administration! They are actually selling off their notes to devalue the US Dollar to increase their ability to manipulate the purchasing of Silver……They have more than 20 corporations in the States for doing exactly this…we have a puppet government and guess who is holding the strings in many issues?