After two consecutive months of increases, Chinese holdings of US Treasuries reached a record high of $502 billion at the end of April, according to Treasury International Capital (TIC) data released on the United States Treasury Department Web site.
TIC data showed that China added $11.4 billion more to its US Treasuries in April from the previous month, marking the second month in a row that China increased its holding of US Treasuries.
Traders believe that this rise in Chinese holdings of US Treasuries is the result of the rapid growth of Chinese foreign exchange reserves. Recent data from the People's Bank of China shows that China's foreign exchange reserve has climbed to $1.6822 trillion by the end of March, up by 39.94 percent from the same period last year.
Analysts noted that China's holdings of US Treasuries will help stabilize the dollar, especially given the fact that the United States government just showed clear support for it.
Although China's total holdings of US Treasuries reflect an upwards trend, the ratio of China's holdings of US assets to total foreign exchange reserves has been dropping continuously, indicating that the Chinese government is investing more and more foreign exchange in other areas.
Former State Administration of Foreign Exchange Deputy Director Wei Benhua noted that with its foreign exchange reserves rising, China will focus more on profitability in the future.
For more details, please read the full story in Chinese (http://paper.cnstock.com/paper_new/html/2008-06/18/content_61977792.htm).
(China.org.cn by Yan Pei, June 18, 2008)
