Unexpectedly, China has actually increased its holdings of US Treasury bonds by $11.9 billion. Has our attitude towards US debt changed?

At the same time, in July, there was an outflow of 388.8 billion yuan from China. What is the reason for this?

The US Department of the Treasury has released the latest data, revealing the situation of US debt holdings by various countries in June this year. We were surprised to find that China's holdings of US debt have actually increased by $11.9 billion, from less than 770 billion in May to more than 780 billion now.

Although the ranking has not changed and it is still second only to Japan, there has been a clear change in the attitudes of China and Japan towards US debt.

In June this year, Japan reduced its holdings by 1.06 billion US dollars, which is the third consecutive month of reduction since April.

But China has actually increased its holdings, and this is the second increase in three months since the second quarter.

Previously, China's holdings of gold have remained unchanged for three consecutive months, indicating that China's strategy has undergone some changes when adjusting the structure of foreign exchange reserves.

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At the same time, we also see that according to the data released by the State Administration of Foreign Exchange, in July alone, the deficit in the banks' settlement and sale of foreign exchange reached 388.8 billion yuan.

Specifically, the amount of foreign exchange sold is 170.57 billion yuan, and the amount of yuan settled and exchanged back from foreign exchange is 131.69 billion yuan. The 388.8 billion yuan difference between the two indicates that a large amount of funds have bought US dollars and other foreign currencies and then flowed out of China.

Of course, the continuous increase in the amount of settlement and sale of foreign exchange also indicates that our trade situation is getting better and better, and both imports and exports are rising year-on-year.However, the deficit in the settlement of foreign exchange transactions also indicates that under the current exchange rate conditions, many enterprises still do not look favorably on the future appreciation trend of the renminbi, even though it is known that the US dollar is about to cut interest rates. This may lead to some enterprises having to bear the exchange rate losses brought about by the appreciation of the renminbi and the depreciation of the US dollar in the future.

From this perspective, the attitude of foreign institutions is more decisive.

The data released by the State Administration of Foreign Exchange shows that foreign capital has increased its net holdings of domestic bonds by as much as 20 billion US dollars, which is 1.4 times more than the previous month.

From this perspective, foreign capital is in a fervent pursuit of renminbi bonds. After all, in addition to obtaining the interest income of renminbi bonds, they can also obtain the exchange rate gains from the future appreciation of the renminbi.

The whole world is buying Chinese bonds, so why do we increase our holdings of US bonds?

What we need to pay attention to is that China's holdings of US bonds have increased by 11.9 billion, with an increase of only about 1.5%.

However, in June of this year, the price of 10-year US bonds rose by 2.12%.

From this perspective, even if China did not actively buy at all, relying solely on the rebound in the price of US bonds, China's holdings have increased.

Now China's holdings have only increased by 1.5%, which is lower than the 2.1% increase in the price of 10-year US bonds, so it is very likely that in June of this year, China was actually secretly reducing its holdings of US bonds, but this was masked by the rise in the price of US bonds.

The continuous selling of US bonds by China is the mainstream, and the continuous buying of Chinese bonds by foreign capital is also the mainstream.