Talk of de-dollarization is back on the table after new data from the US Treasury Department revealed that China offloaded close to $50 billion in US Treasuries in the first quarter and had reduced its holdings by more than $100 billion in the year through to March 2023. The revelations come as China and the US are locked in an increasingly tense stand-off involving trade and China’s intentions toward Taiwan.
Belgium, which is often referenced as a proxy custodian for China’s debt holdings, reportedly disposed of more than $20 billion of Treasuries in the same period.
Not everyone is convinced China’s US debt sales represent anything aggressive as opposed to a routine realignment of debt management activities by the world’s second largest economy. But the question whether Beijing is dumping US debt, combined with a potential broader adoption of the renminbi, suggests the US government will need a strategy to manage…
