China continues to shift away from US debt instruments in the form of bonds due to concerns about economic growth.
Following the end of the federal government shutdown, the US Treasury Department released data showing that the amount of US Treasury bonds held by China fell to $700,5 billion in September.
Even with all the agreements between the two countries after the so-called «customs war,» China has not restored confidence in the US economy and is reducing its dependence on American debt.
If relations between the countries aspiring to global leadership remain acceptable in the future, China will likely continue to reduce its stake in US government debt. The reason for this lies in the problems facing the US economy.
Despite the modest growth, China’s foreign exchange reserves remain at record lows, hitting a multi-year low of $696,9 billion in July. They are now 43% below their peak of $1,32 trillion reached in November 2013.
At the same time, China is continuously accumulating gold, and experts believe that official figures may be lower than actual ones.