China, the biggest foreign holder of US treasuries, is tipped to further reduce its investments in US government bonds after the election of Donald Trump. Analysts expect the value of the bonds to fall after a Trump administration embarks on a round of tax cuts and massive spending on infrastructure projects. Beijing has already slashed its holdings of US treasury bills for four months in a row, according to the South China Morning Post. A high yield on a bond generally results in a lower price and the yields on the US investments are likely to rise under Trump’s presidency, according to Huang Haizhou, a managing director at China International Capital Corp. China now owns RMB 1.16 trillion of US treasury bills, about 37% of China’s total foreign exchange reserves
You must log in to post a comment.
Yes, I would like to receive emails from China Economic Review. (You can unsubscribe anytime)
Copyright © 2018 SinoMedia Group Limited All rights reserved