ID :
188951
Thu, 06/16/2011 - 09:50
Auther :
Shortlink :
https://oananews.org//node/188951
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China boosts holdings of U.S. state debt in April
HONG KONG (Yonhap) - China increased its holdings of the U.S. Treasury debt in April for the first time since last November, data showed Thursday, indicating the U.S. government bonds remain an attractive investment vehicle for the world's No. 2 economy.
According to a monthly report released online by the U.S. Department of Treasury, China's holdings of U.S. government debt rose to US$1.15 trillion in April, up $7.6 billion from the previous month.
It was the first hike after declines for five straight months. China remained the biggest foreign holder of U.S. Treasuries, followed by Japan, which held $906.9 billion worth of the U.S. state debt.
The increase came as the U.S. Federal Reserve is set to stop the second round of quantitative easing at the end of this month.
In November, China criticized the U.S. Federal Reserve's decision to buy $600 billion in U.S. government bonds, saying it would undermine the U.S. dollar's value and lead to the relative appreciation of other currencies.
If the value of the greenback declines, foreign holders could lose appetite for the U.S. government debt as they get paid back in currency that is worth less.
China also claimed the U.S. quantitative easing has increased the risk of inflows of international speculative money.
Many market experts in China expect the end of U.S. quantitative easing will help relieve China's inflationary pressure on imports.
"Commodity prices in China will be stabilized and capital may flow back to the U.S. if the Fed starts to tighten its monetary policy," said Lai Pingyao, a professor of economics at the University of International Business and Economics in Beijing.
According to a monthly report released online by the U.S. Department of Treasury, China's holdings of U.S. government debt rose to US$1.15 trillion in April, up $7.6 billion from the previous month.
It was the first hike after declines for five straight months. China remained the biggest foreign holder of U.S. Treasuries, followed by Japan, which held $906.9 billion worth of the U.S. state debt.
The increase came as the U.S. Federal Reserve is set to stop the second round of quantitative easing at the end of this month.
In November, China criticized the U.S. Federal Reserve's decision to buy $600 billion in U.S. government bonds, saying it would undermine the U.S. dollar's value and lead to the relative appreciation of other currencies.
If the value of the greenback declines, foreign holders could lose appetite for the U.S. government debt as they get paid back in currency that is worth less.
China also claimed the U.S. quantitative easing has increased the risk of inflows of international speculative money.
Many market experts in China expect the end of U.S. quantitative easing will help relieve China's inflationary pressure on imports.
"Commodity prices in China will be stabilized and capital may flow back to the U.S. if the Fed starts to tighten its monetary policy," said Lai Pingyao, a professor of economics at the University of International Business and Economics in Beijing.
