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China to dump 700 billion US bonds

Chinese members of PDF are convinced of the coming USD apocalypse. Where have I heard that before? Oh, about a million times. :rofl:

China has been dumping US treasuries for a while now? So why is it considered news? And you can only dump US treasuries if someone is willing to take them off your hands. And there are plenty of buyers. Call the US rogue, and even suicidal, but the US dollar and US treasuries will always remain a haven for safety.
 
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How will this affect the trade war? More leverage to China I'm guessing.
we.....if u have any sense when in a war, you dont "feed" your enemy. Russia also dumped US treasuries. thats all for now.
 
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Lol @ OP using source from QQ. Let them live in their bubble, they probably don't even understand the basics of finance.

Meanwhile in the real world, the Chinese government is trying to develop an offshore market for Chinese companies to raise funding in USD. The Chinese government must be stupid then, if the USD is collapsing according to them. :lol:

https://www.scmp.com/business/banki...ns-record-sale-dollar-bonds-worth-us6-billion

There's another guy @Han Patriot who claimed that China's holding of US bonds is a WMD which can destroy the USD. I pointed out that Japan holds even more US bonds than China and can destroy the USD too according to his logic. But he turned around and say, Japan is different; they are simply paying tribute to the US. :cheesy:

China holding US bonds = WMD
Japan holding US bonds = Tribute

What double standards. So I say don't bother talking logic to nationalistic fanatics like them, they can't even make a coherent argument when it comes to their country. :lol:

提醒一下。
There is a passage that I don't know if you have noticed.

俄罗斯卫星通讯社11月25日报道,据观察人士估计,中国完全有可能还将抛售规模高达7000亿美元的美国国债。如果说市场已经习惯了美国国债小规模减持的话,那么短时间内大量抛售则会引起市场恐慌。

The source is actually Sputnik. And there are no errors in data.

另据彭博社称,据悉在上周四,一名看跌期权的买入者对10年期美债收益率冲高至2.5%押注了250万美元,换言之,该美债交易员当前正在押注,这就可能意味着美债抛售或只是刚刚开始。

事实上,我们多次强调,包括中国、俄罗斯、日本、土耳其、德国、印度等十多个国家背景的美债投资者近大半年也在开始大量减持美债,据美国财政部11月18日最新公布的数据显示(持仓数据会有两个月延迟),虽然美国国内投资者对美债的需求在增长,但全球央行却在远离,已连续13个月减持美债,9月份,外国央行净出售美国国债343亿,创九个月新高,期间总共出售额近2993亿美元。

其中,9月,美债的最大的两个海外持有者日本和中国均减持了美债,日本的美债持仓较8月大幅减少289亿美元至1.1458万亿美元,为4月以来第一次减持,减持规模创至少2000年以来新高。

中国所持美债也已连续三个月大幅下降,这也是在过去的七个月中第六次抛售美国国债,目前持仓降至自2017年5月以来的最低水平至1.102万亿美元,而从更长时间范围来看,截止今年9月的前12个月,中国已累计抛售了约911亿,另外,俄罗斯与土耳其两国已消失在最主要的30个海外持债人名单中,德国更是从今年4月份开始,共计连续重手减持了115亿美元。
 
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提醒一下。
There is a passage that I don't know if you have noticed.



The source is actually Sputnik. And there are no errors in data.

You believe the USD is collapsing?
 
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You believe the USD is collapsing?

I didn't mean that.
也不认为中国会抛售美债,看起来是自己会吃亏。
我只想说他引用的消息(源和数据)没什么问题。
 
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LOL. As if that have anything to do with US dollars.

Many people seems to forget T-Bill is also an investment. Country trade T-Bill is like we trade stock, sometime you buy, sometime you sell. Indeed China sold nearly 700 billions T-Bill since 2015 (If my memories serve me right) but that does not mean

1.) Those T-Bill goes no where, somebody have to buy them for China to sell them, and we did not see who buy them, maybe Japan who need to hold on to more US T-Bill in place of the reserve? Or simply US financial outlook have improve and buy back the T-Bill. Judging form the US treasury report, Japan simply buy them off China. One need to realise that China still hold an extreme amount of US T-Bill (I think it was 1.1 trillion) after said "Dump"

2.) That have nothing to do with US currency as OP suggested. Currency is not T-Bill, T-Bill help with currency flow, but that is just the secondary role, the primary role is simply bank on US Dollars, and since US is China Top trading partner. Of course holding US Treasury Debt is a good thing. It give China negotiation power. That does not change anything regarding currency flow. Simply because T-Bill is comparatively small number (low 6 trillions) compare to currency flow with US Dollars (9 Trillions a day)

The reason why China decrease their T-Bill is actually very simple. China is having a trade war with the US T-Bill is a liability for US in term of a trade conflict (Remember country hold T-Bill have negotiation power to US). And in term of US-China Trade war, US want to limit China control over its Currency, actually China selling US T-Bill is a desire effect for US.

In fact, China sell T-Bill is bad for China, because in short, it created demand on its own currency, and at this moment, Yuan is not as strong to take the share US dollar leave behind.

@Mista

You didn't believe that China will economically disengage with the US, and how you can eat more crows.

The US bonds are toxic financial assets, no one will buy it anymore. Most countries in the world will just follow suit just like they choose Huawei as the main provider for their 5G network.

Indeed, the question now is whether China continues to being an international debt net buyer, or net seller.

OBOR is a pricey adventure Xi took us on. Our state companies doing infra project have excellent credit histories. Nevertheless, I believe they get debt too cheaply, and at 3-4% there will be a lot of buyers even in the West for it.

There will be less burden on state banks lending for near free, give more incentives to big institutional debt buyers from overseas to distance themselves from US bonds, and play for further Yuan internationalisation.

I still maintain, that internationalising our debt will only be beneficial until a reasonable limit. I don't want China to turn into a debt economy akin USA.

Now the OBOR has proved that President Xi and his team are simply genius. Without the OBOR, we would be more damaged in our export economy in a trade war with the US.

China's top elites did already forecast that the next POTUS after Obama would be a rogue one.

Since the US can never tolerate the Chinese people to live with living standard comparable to the West, they want to enslave China for eternity, and we have no choice but to disengage with them.
 
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US is in desperation as the ground reality is that the US is on an economic downturn, they will lash out and try to find any way to stabilize their economy to prolong their vicious and over-inflated spending.

After Guantanamo, Afghanistan, Iraq, and Syria revealed the ugly truth, the reputation of the US has been lost forever. No more songs of freedom and democracy, it is all about slowing its demise.

I don't believe China is that foolish to wage direct military aggression on the US, but there are ways to respond to US provocations besides direct war. China is going to hit the US economically and wage proxy conflicts on its slaves (SK, Japan, India, Taiwan,etc.)

Russia, on the other hand, may wage limited military invasions on US puppets in Europe, while also directly interfering in the US political battles and social divisions to increase animosity between Americans.

I could even see in the distant future, an emboldened Russia wage military pressure on a weakened US from its Northwest.

This is a golden moment for Muslim nations to escape from under the pressure and hold of the US boot and exert their sovereignty.

That is exactly what Iran, Turkey, and Pakistan are doing, with full blessings of China and Russia.
 
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Chinese exports are not as FX dependent as people tend to think.

A lot of our export is really "foreign materials+Chinese labour." To export $100 worth of goods, we have to import around half of that in materials.

If Yuan will go above 6 again, manufacturers will switch to making cheaper goods with more foreign materiel, and if it goes the other way around, they will do the opposite.

You don't understand import/export. It's not whether or not you buy material "internationally" and make stuff and sell them internationally. But rather, the action of selling is the one that create the currency demand. In the business, it's known as T+X settlement.

If you do any business internationally (Either thru TT, Third Party Payment, etc), you know money is not settle immediately. That is what we called T+X, what does that mean is effectively, what is then said is your bank temporary owe you the payment for an item until the money is settled.

Let me give you an example on layman term. Say you sell 100RMB worth of item to United States, the other party pay USD, and the bank would need to convert that USD to RMB which is the denomination to your own bank account. Which mean the bank itself would need to adjust their currency reserve by increasing the amount in USD at the same time decrease its own RMB reserve by 100 and increase your RMB balance in your bank, and until that USD (whatever amount it was, since I have no time to go check the exchange rate) is credited, the bank is 100 RMB short, because the bank pay you 100 RMB. And since settlement time varies, the bank is out for 100 RMB for the duration of settlement. (The duration is depending on the time difference, US/China bank clearance procedure, and some other factor)

So, basically, when your order is filled, you gain a handsome 100 RMB, and the buyer is waiting on the item you sell them, however, your bank is 100 RMB out of pocket. Which they need to fill somehow. Now imagine there are millions of people like you, selling hundred of thousand of good internationally between China and international destination. Just say a million Chinese sell 100 RMB stuff at the same time to overseas, the bank would temporary be in debt for 100 millions RMB at that instant.

Now, the more the export, the more this gap will lead to such debt (pretty obvious), and there are only 2 ways to deal with it.

1.) Print more money as more export demand. Which is honestly quite stupid. You print money will devalue your currency. (Which by the way is what US want in this trade war)

2.) Use other people money, that's what Forex is for, to balance the balance book with your own currency. When you need more RMB in reserve, you borrow from the Forex. Say if in a pinch, a spike of Chinese export increases, it also increase the demand of RMB, and what the bank and the government do is they take money out form Forex (Borrowing) and put it in the bank and settle that in place of RMB, and when the debt settled, you put the money back into Forex, in the previous example case, you take USD out from your Foreign Reserve and put them back when the USD was cleared by your US Buyer.

That is why export orientated nation all depends on their Foreign Reserve. And if China is dumping the T-Bill, that mean they will need to either acquiring more Forex form other country (like GBP, Euro and so on) to compensate, which would be the same, because your buyer is in US, they don't pay you with GBP, Euro or etc, or they will need to increase their monetary output to compensate. And again, this is actually what US wanted, because Printing 1 trillions USD worth of RMB would put China in financial strength more so than the American, because the American can simply find someone else to buy the T-Bill, which in these case, Japan happily bought them.

Lol @ OP using source from QQ. Let them live in their bubble, they probably don't even understand the basics of finance.

Meanwhile in the real world, the Chinese government is trying to develop an offshore market for Chinese companies to raise funding in USD. The Chinese government must be stupid then, if the USD is collapsing according to them. :lol:

https://www.scmp.com/business/banki...ns-record-sale-dollar-bonds-worth-us6-billion

There's another guy @Han Patriot who claimed that China's holding of US bonds is a WMD which can destroy the USD. I pointed out that Japan holds even more US bonds than China and can destroy the USD too according to his logic. But he turned around and say, Japan is different; they are simply paying tribute to the US. :cheesy:

China holding US bonds = WMD
Japan holding US bonds = Tribute

What double standards. So I say don't bother talking logic to nationalistic fanatics like them, they can't even make a coherent argument when it comes to their country. :lol:

To be honest, I think only the gullible people here will think that is anything significant.

To us Financial Trained people, it's just another day at the office.

But you need to admire how people can blow something out of nothing and jump up for joy, I mean how stupid will you see that's something indeed needed to jump for joy lol

And good catch on the QQ reference, I did not actually read the reference.

You didn't believe that China will economically disengage with the US, and how you can eat more crows.

The US bonds are toxic financial assets, no one will buy it anymore. Most countries in the world will just follow suit just like they choose Huawei as the main provider for their 5G network.

So, still holding 1.1 trillions US Treasury bond and is currency no 2 spot (not by much actually) of US T-Bill holder is "Disengaging" with US economically? You need to understand what's "Disengaging" mean

Going by the current rate (China shredding 2-5 billions each months) It will take at least 20 years to fully shed the T-Bill 40 years if we use the low end estimate

And lol at US Bond are toxic, I mean you are the only person who said that, other people will point and laugh at China for taking a loss and dumping the T-Bill, Japan, in particular, have that smile on its face when they took the T-Bill of China.

According to their logic of dumping US bonds.

It was sarcasm by the way.

I think this post is the golden rooster as to show who lack financial knowledge, now we all know who is not well versed in these matter...

How will this affect the trade war? More leverage to China I'm guessing.

If you really believe the Chinese member here, this is put US Dollar in big trouble..LOL 700 billions is less than 1 year of US Military spending..

US financial asset is upward to 249 trillions, USD alone have a settlement rate of 9 Trillions per day in transaction all over the world. Dumping 700 billions don't even dent the US Financial Asset and outlook, Infact, the only way China can sell is at a loss (not a big loss but a loss regardless) to find someone to buy it, otherwise they cannot sell them.

But the most it hurt is Chinese own financial asset, think about it, with the T-Bill gone, the Chinese Central bank would need to replace it with something, either it's another foreign asset or to produce more monetary product to compensate, which 700 billions over 4 years would put strain to Chinese own money value.

Have a full explanation on the post above, you can read them.

I didn't mean that.
也不认为中国会抛售美债,看起来是自己会吃亏。
我只想说他引用的消息(源和数据)没什么问题。

I think you are probably the only member here get what would happen actually...

but yes, you are right, the Data is correct, China is indeed selling US Bond in 2-5 billions a month since 2019.

This is the actual list from US Treasury

https://ticdata.treasury.gov/Publish/mfh.txt
 
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You are betting against the house, and house always wins.

There is only one way not to lose, and that is to quit at the right time. Quit the game at the right time with enough players to survive and build you own game.

Saddam and Qaddafi tried but they had no leverage or friends.
You think China is libya or Iraq? China got DF-41 with 10 MIRV. I dare American to try invade China mainland.
 
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Chinese exports are not as FX dependent as people tend to think.

A lot of our export is really "foreign materials+Chinese labour." To export $100 worth of goods, we have to import around half of that in materials.

If Yuan will go above 6 again, manufacturers will switch to making cheaper goods with more foreign materiel, and if it goes the other way around, they will do the opposite.
You don't understand import/export. It's not whether or not you buy material "internationally" and make stuff and sell them internationally. But rather, the action of selling is the one that create the currency demand. In the business, it's known as T+X settlement.
I think you don't get it
 
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Lol @ OP using source from QQ. Let them live in their bubble, they probably don't even understand the basics of finance.

Meanwhile in the real world, the Chinese government is trying to develop an offshore market for Chinese companies to raise funding in USD. The Chinese government must be stupid then, if the USD is collapsing according to them. :lol:

https://www.scmp.com/business/banki...ns-record-sale-dollar-bonds-worth-us6-billion

There's another guy @Han Patriot who claimed that China's holding of US bonds is a WMD which can destroy the USD. I pointed out that Japan holds even more US bonds than China and can destroy the USD too according to his logic. But he turned around and say, Japan is different; they are simply paying tribute to the US. :cheesy:

China holding US bonds = WMD
Japan holding US bonds = Tribute

What double standards. So I say don't bother talking logic to nationalistic fanatics like them, they can't even make a coherent argument when it comes to their country. :lol:
Yes I stand by my claim. There is a US base in Japan not China, they buy it to finance their US master, they dump it, US will invade Japan mainland. :)
 
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