• China reduced its holdings of US Treasury bonds to a 14-year low in June.

• Bond prices fell in 2023 as investors worried about the Federal Reserve raising interest rates.

• Tensions between Washington and Beijing also remain high.

China cut its holdings of Treasurys to a 14-year low in June, as tensions persist between Washington and Beijing and US adversaries try to undermine dollarsovereignty.

The world’s second-largest economy has reduced its exposure to US government debt to $103 billion, or 11%, according to… Treasury data Posted Tuesday.

It is the third month in a row that Beijing has sold off Treasurys, bringing its total holdings to the lowest level since May 2009, according to South China Morning Post.

Bond prices fell in 2023, with Two years returns Jumping 169 basis points and returns on 10 year bonds It rose 127 points as investors worried about the long-term impact of aggressive rate hikes by the Federal Reserve and government issuance of new debt.

China seems to be feeding defeat with The authorities are engaged in a geopolitical battle with the United States and engage in it Take off the dollara concerted effort to shed the dominant role of liability in international trade.

It is likely to continue to reduce its holdings of US debt over the next few months, according to experts.

“The ratio of US debt to China’s foreign exchange reserves is expected to continue to decline,” Tang Yao, an economics professor at Peking University, told the state-run newspaper. China Daily Wednesday.

Japan also reduced its exposure to Treasurys in June, according to data on Tuesday, while the United Kingdom and Belgium each increased their spending on US government bonds by more than $50 billion.

Read the original article at Business interested

China’s decision to decrease its holdings of US Treasury bonds to a 14-year low in June has sparked concerns among investors and analysts alike. The ongoing tensions between Washington and Beijing are only adding fuel to the fire, as the two superpowers continue to engage in a geopolitical battle that is impacting global markets.

The reduction in China’s exposure to US government debt has raised eyebrows, with many speculating about the long-term implications of such a move. Bond prices have already taken a hit in 2023, as investors fret over the Federal Reserve’s aggressive rate hikes and the issuance of new debt by the government.

Experts predict that China is likely to continue reducing its holdings of US debt in the coming months, as it seeks to lessen its reliance on the dollar in international trade. This strategic shift is part of a larger effort by Beijing to challenge the US’s dominance in the global economy.

In addition to China, Japan also decreased its exposure to Treasurys in June, while the United Kingdom and Belgium increased their holdings of US government bonds. These movements in the bond market reflect the growing uncertainty and tension in the global economic landscape.

As the US-China rivalry continues to escalate, the repercussions are being felt far beyond the realms of politics and diplomacy. The financial markets are also feeling the impact, with bond prices fluctuating and investors on edge.

The coming months will be crucial in determining how this situation unfolds, as both countries navigate their complex relationship while trying to protect their own economic interests. The bond market will undoubtedly be closely watched by analysts and investors, as they try to gauge the potential impact of China’s decision to reduce its holdings of US Treasury bonds.