The Communist Party Newspaper and People’s Daily news bulletin reported on Thursday that university professors said that China could cut its US Treasury holdings from the current $1 trillion to around $800 billion. That is the topic.
Of course, if you sell U.S. Treasuries in earnest, a slump in U.S. Treasury prices is unavoidable, which is a risk factor for financial markets, but it is not so easy to do so.
China would like to gradually move out of U.S. Treasury holdings, but if it sells sharply, it will naturally lose its price, and
If you wait, it is possible to compensate for the new corona, and if it is recognized as an opponent country, you can invalidate the government bond.
Either way, it is difficult for China to slip out of US Treasuries.
However, some say that even if China exits, there are multiple places to buy, including the Fed, and it does not matter.
For now, we assume that China will not be a big problem unless it sells rapidly.