Why Did China Increase Its US Debt &Nbsp For Four Consecutive Months?

China is still the largest in the US.

US dollar is still the best choice in the market.

China's purchase of US debt stems from its huge foreign exchange reserves.

Zhu Ying, an economics professor at Shanghai Normal University business school, pointed out that the double surplus of China's balance of payments has resulted in an increasing supply of foreign exchange in China's foreign exchange market.

In accordance with China's current foreign exchange settlement and sale system, the central bank buys dollars in the foreign exchange market, and China's foreign exchange reserves will increase.

"Foreign exchange reserve funds should be used to ensure stability and security first, and not to buy US debt.

Buying stocks is even worse. "

Wang Zhaocai, deputy director of the Financial Science Research Institute of the Ministry of finance, told our reporter.

The dollar is depreciating, but so far no other currency has been able to compare with its security.

Yan Xiaona, deputy director of the international finance and international economic research office, told our reporter that in the case of the European sovereign debt crisis continued, the dollar assets are relatively safe compared with the euro assets. In the case of Japan's economy still affected by the earthquake, and the yen exchange rate has been running at a historical high level after World War II, the dollar assets are also safer than Japanese yen assets. In the long run, although the US dollar exchange rate has been depreciating for the past 20 years, there is still about 3/4 of the net capital flowing into the United States, although the net capital inflow has dropped rapidly to 1/3 after the crisis. But after the crisis, the 2010 rebounded rapidly, indicating that the capital flow of the whole world has not yet found a new flow pattern.

Under such circumstances, US dollar assets remain the second best choice in all international financial markets.

It is suggested that

Therefore, increasing the US debt is an option for foreign exchange reserve investment.

Chinese officials have repeatedly stressed that overweight is a normal market investment operation.

In addition to China, Japan, the second largest creditor in the United States, increased its holdings of US $3 billion 800 million in July compared to June.

Britain, the third largest creditor country in the United Kingdom, increased its holdings of US $4 billion 700 million in July.

In addition, the oil exporting countries also increased their holdings of treasury bonds in that month.

In fact, under the turbulent situation of global financial market, countries are more optimistic about the security and mobility of US debt, and regard the US debt as a safe haven.

In March this year, the Japanese earthquake and the European debt crisis, a large number of funds to buy US bonds to increase their prices.

After the S & P downgraded the US, the US bond price rose.

August, 10 year period in the United States