U.S. Trea­suries

Beijing Review - - THIS WEEK -

China’s hold­ings of U.S. Trea­sury bonds in Septem­ber hit their low­est in a year, but the coun­try re­mained the largest for­eign buyer of U.S. gov­ern­ment debt, sta­tis­tics re­leased by the U.S. De­part­ment of the Trea­sury on Novem­ber 16 showed.

China’s hold­ings of U.S. Trea­suries to­taled $1.151 tril­lion in Septem­ber, down by $13.7 bil­lion from the pre­vi­ous month.

The sta­tis­tics also showed that Ja­pan, the sec­ond largest for­eign buyer, was a net seller of U.S. Trea­suries in Septem­ber too, with its hold­ings slip­ping from $1.03 tril­lion to a one-year low of $1.028 tril­lion.

The data rep­re­sented the ag­gre­ga­tion of pur­chases and sales by both for­eign of­fi­cial in­sti­tu­tions and pri­vate in­vestors. To­gether, U.S. Trea­suries saw a net for­eign out­flow of $29.1 bil­lion in Septem­ber.

Of that, net for­eign pri­vate in­flows were $23.5 bil­lion and net for­eign of­fi­cial out­flows were $52.7 bil­lion, mean­ing that the for­eign pri­vate sec­tor re­mained a net buyer, while for­eign of­fi­cial in­sti­tu­tions con­trib­uted more to the sell­ing ac­tiv­ity.

Wash­ing­ton has in­creased the is­suance of its gov­ern­ment bonds since the mas­sive cor­po­rate tax cut was en­acted last De­cem­ber. Busi­ness in­sid­ers have warned of im­bal­ance be­tween de­mand and sup­ply.

“I think we have a sup­ply­de­mand prob­lem for bonds that will par­tic­u­larly come next year or the year af­ter,” said Ray Dalio, founder of the world’s largest hedge fund com­pany Bridge­wa­ter As­so­ci­ates.

“In other words, be­cause of that tax cut and the deficit, we’ll have

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