China net seller of US government debt in August

China was a net seller of US government debt in August, bucking the broader trend of foreign investors scooping up US Treasury Bonds, the Wall Street Journal reported. China sold about US$36.5 billion for the month – its biggest sell-off this year – lowering its net holdings to US$1.12 trillion. In addition, the country’s portfolio of US debt shifted somewhat, as China sold a net US$40.14 billion in long-term notes and bonds, but purchased US$3.68 billion in short-term Treasuries. However, analysts note that the data, provided by the US government, may not reflect all of China’s dealings in the US government debt market; for example, China is also able to purchase US debt in markets like London. However, net foreign capital inflows, which track all foreign buyers and sellers of long- and short-term US government debt, recorded a net US$89.6 billion inflow in August, up sharply from a US$52.4 billion outflow in July.