China cuts investment in US public debt to the lowest level since 2009

The Chinese government has reduced the amount of investment in US government debt by reducing the share of the PRC as a holder of US securities. This was reported on August 16 by the Hong Kong newspaper South China Morning Post.

China cut its holdings of U.S. Treasuries in June to its lowest level since 2009 as concerns about the safety of overseas assets persisted amid Washington’s efforts to reduce risks.

It is noted that for several months China has been actively reducing its share in the US public debt. Despite this, China is currently the second largest holder of US securities. According to the data, assets were reduced by $11.3 billion, to $835.4 billion.

Compared to last year, China has reduced its assets by $103 billion, accounting for 11% of total investment. The material says that China directly connects such reductions with the danger of investing in dollars and believes that in this way it is possible to ensure the safety of Chinese assets.

Recently, relations between the United States and China have begun to deteriorate again. So, on August 9, US President Joe Biden signed an order to limit US investment in China’s high-tech industries. This measure is expected to be implemented next year. It will concern investments in semiconductors and microelectronics, quantum computing and improving the capabilities of artificial intelligence.

On the same day, The Washington Post published a statement by the representative of the Chinese Embassy in Washington, Liu Pengyu. He stressed that China is disappointed with the White House’s decision. The investment by the United States of America has been of great importance for the development of critical technologies, Pengyu said.

On August 10, Belenkaya, an economist, told Izvestia in an interview that limiting US investment in China’s technology industry would only increase tensions between the two countries. Such moves may slow down China’s technological development in the most advanced areas, but are unlikely to stop it, she said.