China reduces holdings of U.S. Treasury bonds to $760.1 billion in October

(ECNS) Chinese holdings of U.S. Treasury bonds fell to $760.1 billion in October, according to data released by the U.S. Department of the Treasury on Thursday (U.S. time). It marked a fourth consecutive month that China’s holdings of U.S. Treasury bonds decreased, data showed.

China’s holdings of U.S. Treasury bonds in October came down by $11.9 billion month-on-month, and reached the lowest point since February 2009. But the country still remains the second-largest holder of U.S. Treasury bonds in October.

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Japan, the largest holder of U.S. Treasury bonds, also cut its holding by $20.6 billion in October, bringing its total holdings to $1,102.7 billion, the U.S. Department of the Treasury data showed.

Xi Junyang, a professor at the Shanghai University of Finance and Economics, told the Global Times on Friday that the trend of China reducing its holdings of U.S. Treasury bonds comes as China’s central bank has been diversifying its foreign exchange reserve assets in recent years as normal operations, with increased purchase of assets such as gold.

China’s holding of U.S. government debt has been below the $1 trillion mark since April 2022, data showed.

According to data released by the State Administration of Foreign Exchange (SAFE) on December 7, China’s foreign exchange reserves totaled $3.2659 trillion at the end of November, up $4.8 billion, or 0.15 percent, from the end of October.

The rise in foreign exchange reserves was due to factors such as the rise in U.S. dollar index, as well as monetary policies and expectations of major central banks and macroeconomic data, which collectively led to an increase in the price of global financial assets, said SAFE.

In terms of gold reserves, the People’s Bank of China (PBC), the country’s central bank, has a gold reserves of 72.96 million ounces by the end of November, an increase of 160,000 ounces compared with that of October, data released by the PBC showed on December 7. It marked the first time that PBC increased its gold reserves in half a year.