China sells US bonds to 'show concern

China's statements and actions a lately are serious business indeed. We need China to be buying our bonds, not selling them. These warnings out of China should be taken very seriously by the Obama Administration. The fuse has been lit for the demise of the U.S. dollar and the rise in interest rates and the nasty inflation that will accompany it's fall. For years I have been warning that our massive trade deficit with China was a national security issue and that is becoming more evident with each statement out of the Chinese authorities. The Chinese can aggressively dump our bonds and crash the dollar and the U.S. economy, it's totally their choice. Granted they have a vested interest in the health of the U.S. economy but communist governments don't always do what's best for their people.-Lou

China sells US bonds to 'show concern

A decision by China to reduce its US Treasury holdings suggests concern about the US attitude towards its economic woes, Chinese economists were quoted as saying in state media Wednesday.

The remarks, coming after US data showed a modest decline in Chinese investments in US government bonds, were in contrast to an earlier statement in Beijing which had said the recent sell-off was a routine transaction.

"China is implying to the US, more or less, that it should adopt a more pragmatic and responsible attitude to maintain the stability of the dollar," He Maochun, a political scientist at Tsinghua University, told the Global Times.

According to US Treasury data issued Monday, Beijing owned 763.5 billion dollars in US securities in April, down from 767.9 billion dollars in March.

It was the first month since June 2008 that Beijing failed to purchase more US T-bills.
Zhang Bin, a researcher at the Chinese Academy of Social Sciences, said China's move showed a more cautious attitude.

"It is unclear whether the reduction will continue because the amount is so small. But the cut signals caution of governments or institutions toward US Treasury bonds," Zhang told Xinhua news agency.

China's foreign ministry said Tuesday that its purchases of US Treasuries remained based on "security, liquidity and value preservation".

For Zhao Xijun, deputy director of the Finance and Securities Research Institute of People's University, China may have reduced its holding of US Treasuries simply because it needed the money.

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