China sheds US debt – Treasury data – RT Business News

Beijing’s holdings of US securities have fallen by nearly $100 billion in six months

China’s holdings of US Treasury securities fell below $1 trillion in May for the first time in more than a decade, according to information released by the US Treasury Department. Official data is regularly published with a two-month delay.

China, the second largest foreign holder of US government debt, has reduced its holdings for six straight months, from $1.080 billion last November to $980.8 billion in May. That’s a drop of nearly $100 billion, or 9%. The last time China held less than $1 trillion in US Treasury securities was in May 2010 ($843.7 billion).

Japan, the largest foreign holder of US government debt, also recently reduced its holdings. In the six months from November to May, it fell nearly $116 billion to $1.212 trillion.

The total US national debt was just above $30.4 trillion last month. Washington is struggling to contain soaring inflation, which hit a 41-year high of 9.1% in June. The US Federal Reserve raised its benchmark interest rate by 0.75 percentage points in June, triggering warnings of a possible recession. Another increase could be introduced at an upcoming meeting next week.

According to CNBC, rising interest rates have made U.S. Treasuries potentially less attractive, but China’s decline in share could also be attributed to Beijing’s work to diversify its foreign debt portfolio.

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