December 17, 2018, 4:48

China Cuts US Bond Investments by Almost $14 Bln Amid Trade Row – Report

China Cuts US Bond Investments by Almost $14 Bln Amid Trade Row – Report

The developments come amid the US-Chinese trade row which broke out in May when President Donald Trump slapped tariffs on some Chinese imports in order to fix the $500 billion bilateral trade deficit. Since then, the two sides have exchanged few rounds of import duties on each other despite attempts to resolve the conflict via dialogue.

China’s holdings of US Treasury bonds in September totalled 1.151 trillion US dollars in September, plummeting by 13.7 billion dollars from the previous month; even so, Beijing remains the largest foreign buyer of the US bonds, according to statistics released by US Treasury Department.

The statistics also showed that Japan, the second largest foreign buyer, also remains a net seller of US treasuries in September, with its holdings slipping from 1.03 trillion dollars to a one-year low of 1.028 trillion dollars.

READ MORE: China-US Trade Wars Have Little Impact on Beijing Economy — Statistics Bureau

Brazil holds third position, increasing its assets by 18 billion dollars in August and currently possessing the US bonds worth a total of 317 billion dollars.

In mid-October, Bloomberg reported that Beijing had sold three billion of sovereign dollar bonds in the face of the ongoing US-China trade spat, in a move that the news agency described as “an even bigger demonstration of China’s pull in the international bond market.”

Ziyun Wang, partner and senior portfolio manager at DeepBlue Global Investment Ltd, for his part, argued that “the bond issuance is more like a vote of confidence in China’s creditworthiness.”

READ MORE: China, US Resume High-Level Talks to Resolve Trade War — Commerce Ministry

US Treasury Secretary Steve Mnuchin, in turn, said that he is not “losing any sleep” over the prospect of China selling its stockpile of US government bonds.

The current trade row between the US and China escalated in June when US President Donald Trump slapped a 25 percent tariff on $50-billion worth of Chinese goods, with Beijing responding in kind. Trump accused China of “unfair trade,” including alleged state-led efforts to steal US technology and intellectual property as well as “discriminatory technology licensing practices.”

In September, Trump issued new tariffs on $200 billion in Chinese goods, prompting a tariff hike on $60 billion of American products from Beijing.

Source: sputniknews.com

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