China holds 767.9 billion U.S. Treasuries to hold the biggest creditor for nearly a year

When the top creditor came to the market nearly a year ago, the US Treasury secretary, although President Barack Obama May 14 made it clear that he "cannot always borrow from China," U.S. Treasury Secretary Timothy Geithner left for China on May 31 to escape "suspicion" of "borrowing money from the mainland". "This time the US Treasury secretary came to China to buy government bonds, and it was very clear that the money was coming."　　Shao, director of the American Center for Economic Research at the Chinese Academy of Social Sciences, a senior American research expert, spoke frankly to China Economics weekly. China again increased its holdings of $23.7 billion trillion in US Treasuries this March, with a total holding of $767.9 billion trillion, which has "stabilised" the top U.S. lender.　　According to relevant information, the United States in 2009 and 2010 the size of the debt will reach 2.56 trillion U.S. dollars and 1.14 trillion U.S. dollars, this year September before the issuance of debt is about 700 billion.　　Will Mr Geithner be able to borrow money from China this time?　　"Sit tight" the biggest creditor in nearly a year, China's increased holdings of U.S. Treasuries has never ceased. According to the International Capital Flows report (TIC), released by the US Treasury last year, China held US Treasuries at $585 billion trillion by the end of September 2008. Japan's holdings in the month were reduced from $586 billion trillion in August to $573.2 billion trillion.　　Since then, China has replaced Japan as the largest holder of US Treasuries.　　After six months, overweight is still continuing. The latest figures from the US Treasury show that China again increased its holdings of $23.7 billion trillion in US Treasuries this March, with a total holding amount of $767.9 billion trillion.　　has continued its position as the world's largest holder of US Treasuries since last September. This means that China has added $182.9 billion trillion in U.S. Treasuries in the last six months. In addition to China, several countries and regions have also increased their holdings of U.S. Treasuries in March, according to data released by the US Treasury. Japan remains the second-largest holder of US Treasuries, holding 686.7 billion dollars.　　Russia and Britain have overtaken Brazil as the third and fourth largest lenders in the United States.　　But the money still does not meet America's needs. According to the China Economic Evaluation Center of the Chinese Academy of Social Sciences, the information provided by May 7, 2009, on the book, The Treasury balance is $11.2 trillion trillion; the U.S. government May 11 estimated the fiscal deficit of $1.84 trillion trillion this year, 4 times times the fiscal deficit in the previous year; The U.S. government estimates the fiscal deficit from October 2009 to September 2010 is $1.26 trillion trillion, and the total deficit from 2010 to 2019 is $7.1 trillion trillion;　　In the coming 75, the debt of the United States without provision for the social security scheme has risen to $51 trillion. No wonder Obama is starting to worry.　　"The burden of long-term debt in the United States is unsustainable," he said in a speech at the New Mexico State Civic Conference May 14. However, after half a month, U.S. Treasury Secretary Timothy Geithner began his trip to China, and the rumours began to speculate whether itMeans the U.S. government continues to borrow more money from China's biggest lender.　　China was hijacked? Since the onset of the financial crisis, the debate over whether China should increase its holdings or reduce its holdings has reached an unprecedented peak as the U.S. economy continues to decline.　　Some people believe that the weakening of the dollar will make foreign exchange assets shrink, so the sound of selling US Treasuries was once high.　　On the occasion of U.S. Treasury Secretary Timothy Geithner's visit to China, the domestic media and online discussions about whether or not to reduce U.S. Treasury debt sounded again. The Global Times recently interviewed 23 prominent Chinese economic experts for "Whether you support China's significant reduction in U.S. Treasuries", with 8 of them supporting a substantial reduction in U.S. Treasuries, with 15 opposing them.　　The number of supporters and opponents is nearly one-fold. In response to the experts ' differences over whether to reduce holdings of US Treasuries, Tao Tao, deputy director of the State administration of foreign exchange balance of payments, said in an interview with China Economic Weekly that "experts ' discussions about whether or not to buy US Treasuries are all about what they want to do, but the crux of the matter is not the question you would like to do or want to do, It's a question of whether or not you can make a choice. "Jia Kang, director of Treasury finance, said more directly about the issue, saying:" Most experts oppose the reduction of US Treasuries, which I think is a helpless option because there is no alternative but to buy US Treasuries.　　"In fact, as early as the dollar began to depreciate last year, the CBRC officials in the public issued the" No way China will continue to buy U.S. Treasury bonds, "the helpless remarks. According to the China Central Bank, in terms of the term structure, long-term bonds are $576.7 billion trillion and short-term bonds are $191.2 billion trillion in China's holdings of US Treasuries.　　Short debt accounted for 24.9%.　　Long-term national debt refers to the repayment period of 10 or more than 10 years of national debt, can enable the Government over a longer period of time, but the owner's income will be affected by the value and price. In the November 26, 2008 of the financial crisis, yields on the 10-year Treasury note fell all the way, creating a new historical milestone: for the first time in 50 years it fell below 3% per cent – down from 2.98%. Treasury bond yields have improved slightly recently, with the latest data showing that the key level of 3.5% has been breached and is still hovering near the point.　　Shao, director of the Center for Economic Research at the American Academy of Social Sciences, told the China Economic weekly that the average yield of U.S. Treasury bonds and short-term Treasuries is 3%, which is equivalent to the interest rate of 3-year fixed deposits (RMB 3-year deposit rate of 3.33%). There is no doubt that the world financial crisis caused by the United States has left US Treasury yields at a historically low rate, and that interest rates have been lower in both short-term and long-term debt than the Fed cut interest rates. In Shao's words, "buying bonds is buying a pile of paper, or even paper, or bookkeeping." But now China is in a very uncomfortablecondition, sell not, buy not, do not buy not sell also not. "Shao to China Economic Weekly" further analysis, first of all, if the sale of U.S. Treasury bonds, the result is no one to take, the bond will fall. The U.S. and China are the biggest losses to the national debt. But the United States has a saving measure-the United States can print money to buy bonds, China can print money, but China's printing of the renminbi, not internationally recognized.　　Therefore, China's "sell" national debt, to both sides of the adverse. The second is to continue buying US Treasuries.　　But when the US economic recovery is uncertain, it is time to buy. The third is neither buy nor sell, keep the status quo.　　China's failure to sell and buy does not stop Europe and Japan from selling Treasuries, and if Europe and Japan sell their bonds, no one will take it, as is the case with the first assumption that selling Treasuries is the same result. "Economically, we were held hostage," he said. Shao told China Economic Weekly that it was not wrong to consider buying US Treasuries because of the large amount of government debt and the ease of access to the market, especially in the early days of reform and opening up, and putting money into national debt to compare insurance.　　The problem is that the volume of purchases of US Treasuries is now too large, leading to a higher dollar dependency on China's foreign exchange reserves, which is harder to separate from the dollar.　　Do you have no choice to continue overweight? The argument is disputed. China's central bank data show that at the end of March 2009, the balance of national reserves was 1.9537 trillion U.S. dollars, an increase of 16.14%.　　Nearly 2 trillion of foreign exchange reserves do not buy Treasuries, what else can buy?　　Jim Rogers, an investment guru, said in Hong Kong in early April this year that China should stop buying US Treasuries and should use a portion of more than $1 trillion trillion in reserves to buy strategic resources such as cotton, wheat and crude oil for a rainy time. In this respect, Jia Kang to China Economic Weekly, said: "A lot of things just wishful thinking, you go to the international market to see the actual situation will know, as long as China buy anything, what will soar." "There is no better project than buying US Treasuries. If we spend our reserves on our investment, we want to go out, but people will limit us, not that we want to go out. Therefore, to buy strategic resources and to go out to invest, is to take a long-term look at things, not now immediately can do things on a large scale, to slowly.　　"Jia Kang said.　　According to Shao, although China currently holds more US Treasuries than the sum of seven western developed countries, there is a strategic view of buying US Treasuries from the current situation. "The increase in US Treasuries now amounts to the United States." Because the United States has collapsed, China is finished, China has collapsed and America is finished. Now the ' two grasshoppers ' are tied together, and it's nice to be in the same boat. "Shao to the China Economic Weekly," the purchase of U.S. Treasury bonds is not China wants to buy, but the United States "forced" China to buy. "Now the Chinese and American interests have been tied together, and Beijing is hard to do."　　Is "debt-equity swap" feasible? Facing the difficult problem, out of many helpless and present situation, China still seems to continue to increaseHolding US Treasury bonds; But the real question is how to get the old debt out of the way before it can increase its holdings of new bonds to defuse and mitigate the risks. "We are ready to go back to the United States with the Federal Reserve, the Treasury and other relevant issuers to exchange, to see whether the conversion of debt to equity swap." Shao told reporters that the U.S. stock market is now a mess, before falling from 14,000 points to 6,000 points, now back to 8,000 points, and sooner or later to return to 14,000 points. At present, American stock has investment value, if can enter at 8,000 points, can also turn nearly one times. And buying Treasuries at best yields 5% less. "After all, the US stock market itself is short of money.　　"Actually, two months ago, Shao had exchanged views with the US Federal Reserve and the Ministry of Finance on this issue as a scholar, and Treasury officials thought his advice was good, but only if they sold the bonds before buying stocks." "Is this going to sell? Now I'm exploring a way to convert government bonds into American equities through an internal conversion mechanism, not through the market.　　Shao said the idea should be right, but there are some legal problems with the operation, and some rules need to be changed. "Debt-to-equity swap is a better way to defuse the debt crisis, the key is how to operate, and then the U.S. stock market back to 10,000 points, then do not turn, then the risk came." Now I would like to sit down and discuss, and we will meet each other with sincerity to solve the problem. "Shao said.