China's US Treasury Holdings Rose in December for First Time in Six Months
Yicai Global
DATE:  Feb 18 2019
/ SOURCE:  yicai
China's US Treasury Holdings Rose in December for First Time in Six Months China's US Treasury Holdings Rose in December for First Time in Six Months

(Yicai Global) Feb. 18 -- China added USD2.1 billion to its United States Treasury holdings in December after leaders of the two countries agreed to stop imposing new trade tariffs on each other.

The world's second-largest economy held USD1.12 trillion in US debt as of the end of 2018, according to data published by the Department of Treasury on Feb. 15. December was the first month since May that China had increased its stake in American sovereign debt.

China and the US have been locking horns in trade since early last year, with Washington slapping an additional 10 percent tariff on USD250 billion worth of Chinese imports, and Beijing responding with similar rates on USD110 billion of American products exclusively.

The US was set to hike those tariffs to 25 percent at the start of this year, but US President Donald Trump and Chinese President Xi Jinping called a 90-day truce while dining at the G20 summit in Buenos Aires in late November. Trump agreed not to increase the rates during that time if Xi agreed to hold discussions on intellectual property theft and forced technology transfers in China, so the pair could try and negotiate long-term agreements from there.

China was still the largest holder of the bills, with Japan -- which also added USD7.5 billion in December -- remaining in second with total holdings reaching USD1.04 trillion.

China had slashed its stake in the bonds by USD17.5 billion in November, taking its holdings to a year-and-a-half low after shedding over USD10 billion in September and October.

Japan's portfolio of US Treasuries also hit a seven-year low in October, but it began buying the bills back a month earlier than China.

Editor: James Boynton

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Keywords:   US,Bonds,Trade Dispute