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HomeeconomyChina EconomyChina slashes US Treasury holdings again as rate-hike cycle’s end looms

China slashes US Treasury holdings again as rate-hike cycle’s end looms

EconomyChina Economy

China keeps slashing US Treasury holdings, but will it reverse course as rate-hike cycle nears end?

World’s second-largest economy offloaded US$13.6 billion worth of US debt in JulyBut China still remains the second-largest foreign holder of US Treasury bills, having been surpassed by Japan in mid-2019US-China relationsFrank Chenin ShanghaiPublished: 11:00pm, 19 Sep, 2023Why you can trust SCMP

Amid persistent concerns over the safety of its overseas assets – most of which are US dollar-denominated – China has slashed its holdings of United States Treasury bills for the fourth straight month.

However, as the Federal Reserve and other major central banks approach the end of their rate-hike upcycle that began in March 2022, analysts say Beijing’s policymakers may need to reassess the situation and rethink their decision to dump Treasuries.

The world’s second-largest economy offloaded US$13.6 billion worth of US debt in July, bringing China’s holdings to US$821.8 billion, according to the latest data from the US Department of the Treasury.

China’s overall holding of US debt remains at a 14-year low, after reaching that level in June.

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