China’s Puzzling Love for US Treasuries

Posted by david on Sep 19, 2012 in Blog | 0 comments

I’ve heard many times People’s Bank of China (PBoC – China’s central bank) officials explain the buying of US treasuries as a sure bet but that was before the US sparked world financial crisis.  For the life of me, I don’t understood why they’re still buying (after a short lull), especially in view of the ‘fiscal cliff’ imminent in Congress and the depth of American national debt which is approaching 100% of GDP.

China, the largest foreign holder of Treasury debt, boosted its holdings to $1.15 trillion, up 0.2 percent from June. Japan, the second-largest buyer of Treasury debt, increased its holdings 0.6 percent to $1.12 trillion.

The Treasury Department says total foreign holdings rose 0.7 percent in July to a record $5.35 trillion.

– AP