China'S First Reduction Of US Debt &Nbsp; Expert Analysis Of Bond Markets In Europe And America

On March 2nd, the latest figures released by the US Treasury showed that China's total holdings fell by 8 billion 200 million last year.

Judging from the impact of the external market on A shares, Li Daxiao, director of the British Securities Research Institute (micro-blog), believes that China should reduce its US Treasury bonds.

"The United States and the main European bond market," he commented on Tencent micro-blog. "The giant bubble that has been breeds in 30 years is ready to burst, and the capital will gradually return to the risk assets, supporting the global main stock market to better. The bull market of A shares will have a better peripheral environment support."

According to the data released by the US Treasury in February 29th, China, as the world's second largest economy, held a total of US $1 trillion and 150 billion in treasury bonds at the end of last year, down from 1 trillion and 160 billion at the end of 2010.

Japan holds a total of 1 trillion and 60 billion US dollars and Brazil has US $226 billion 900 million.

Some media quoted Zhao Qingming, senior researcher of China Construction Bank.

The point of view is: "the operation of reduction, first, the maturity of bonds and the need to sell them; the two is the need to integrate bond portfolios, such as selling old and buying new ones, as well as other investment needs for external storage."

China's reduction

Last December, China sharply reduced its holdings of US Treasury bonds and bought higher yielding mortgage securities, which reduced the proportion of US debt holdings and reached its lowest level since June 2010.

The Financial Times analysis commented that this is because the Federal Reserve is expected to introduce more easing policies.

Tan Yaling, President of the China Foreign Exchange Investment Research Institute, said on Tencent micro-blog that the market was also quarreled with the QE3 of the Federal Reserve (the third round of quantitative easing monetary policy). The US dollar continued to use public opinion to tease market psychology and technology to get the future space of US dollar strategy.

She believes that when judging the trend of the US dollar, "do not be confused by public opinion in the short run, but we should consider and judge comprehensively the short, medium and long factors such as facts, laws, technologies and strategies.

According to the US Treasury Department, China reduced its US debt by 31 billion 900 million US dollars or 2.8% to 1 trillion and 110 billion US dollars in December last year compared with November.

China's holdings of us longer-term bonds also shrank by $32 billion 500 million or 2.8%, to $1 trillion and 100 billion, the lowest since June 2010.