China reduction of US treasury holding normal market move
Published: Dec 17, 2019 06:28 PM

An employee counts banknotes at a bank in Taiyuan, North China's Shanxi Province, on August 2. Photo: VCG

US data shows China's holdings of US Treasury debt declined for the fourth straight month in October, which Chinese experts said is a normal market move amid frequent transactions.

China's holdings of US Treasury debt slid $800 million in October to around $1.1 trillion, the fourth monthly decline in a row, data from the US Department of the Treasury showed on Monday.

By contrast, Japan increased its holdings by $22.2 billion in October to around $1.168 trillion.

"Some Treasury securities held by large financial institutions may be maturing at the point where the US Treasury collects relevant data. Hence, it's normal that at certain points, China's holdings go up or down," Zhao Qingming, a Beijing-based international finance expert, told the Global Times.

Zhao said that data from US Department of the Treasury is a rough figure that only shows an overall trend.

Guan Tao, a professor at Wuhan University, said that the People's Bank of China, the country's central bank, has increased or decreased its US Treasury holdings in recent months, and the fluctuations don't have much impact on the bonds' prices.

According to analysts, there's no sign that China is "weaponizing" its US Treasury holdings, especially after the two countries agreed on the text of a phase one trade deal on Friday.