-
China shouldn’t reinvest its Treasury holdings, Yu Yongding said in a speech.
-
The former central bank advisor cautioned China against increased exposure to US debt risk.
-
If Beijing reduces its holdings, it will need to adjust to trade deficits.
It’s time for Beijing to wean off the US Treasury, as American debt risks seem destined to worsen, a former Chinese central bank advisor said in a speech on Sunday.
The country, which is estimated to hold over $1 trillion in Treasury assets, shouldn’t reinvest the proceeds once these bonds and notes mature, Yu Yongding said.
Instead, “China should accelerate the adjustment of its overseas asset and liability structure, improve returns on overseas net assets and lower the share of foreign exchange reserves in its overseas assets,” he advised, quoted by Bloomberg.
Yongding’s appeal against US debt follows alongside growing alarm on Wall Street that the country could
