China is reducing its holdings of US government debt, with the balance declining 9% through July from the end of last year as sanctions against Russia drive home the risks of relying on the dollar, reports Nikkei Asia.
China’s Treasury bond holdings came to $970 billion at the end of July, US Treasury Department data shows—a small increase from June, preceded by seven straight months of declines. While the total has been trending lower since 2018 amid the trade disputes between Washington and Beijing, it sank by $100 billion, or nearly 10%, in the first half of 2022 alone.
That decline—the steepest on a half-year basis since 2016—coincided with a $38.5 billion rise in Treasury holdings in the Cayman Islands and a $7 billion increase in Bermuda, both well-known tax havens.
