In a move to diversify its assets and accelerate the de-dollarization of its economy, China dumped a total of $53.3 billion in US dollar bonds during the first quarter of this year. As reported by international media, based on data managed by the United States Treasury Office, China currently owns less than 10% of the 8.1 billion bonds that are kept in reserve around the world, in addition to 2.2% of the total US debt, which amounts to USD 34,537. The figures indicate that the Asian country's US debt reserves They are at their lowest level since 2009.
It is thus estimated that China's participation in US Treasury bonds has fallen from 44% to 30% between 2015 and 2023, going from USD 1.2 trillion in 2018 to USD 775 billion at this time. As most analysts highlight, the Chinese government's strategy highlights his intention to diversify away from US assets, while trade tensions between both countries are expected to continue to rise. “China's selling of U.S. securities could accelerate as the U.S.-China trade war resumes,” especially if Trump returns as president, said Stephen Chiu, Bloomberg's chief Asia rates and currencies strategist. Chiu sees it as very likely that China's massive sales are retaliation for the TikTok ban, as well as recent tariff increases on a variety of Chinese goods in the US, a situation that is likely to worsen. if Donald Trump is re-elected as president. Furthermore, «with China selling dollar assets, its gold holdings have increased in the country's official reserves,» the analyst added, referring to the fact that the share of the precious metal in reserves rose 4.9% in April, the highest level according to reports from the Chinese Central Bank. This is a situation that also draws the attention of the International Monetary Fund (IMF), which observes how China, and countries with close ties to this country, increase their gold holdings, while the countries of the US bloc keep them stable. . Gita Gopinath, first deputy managing director of the IMF, spoke on this topic, who believes that gold purchases by some central banks are driven by the fear of receiving sanctions like those applied by the US to countries like Russia and Iran. The official sees an important change in this trend in global economic ties.
Countries are reassessing their trading partners based on their economic and security concerns. Foreign investment flows are also being reoriented based on geopolitical alliances. Some countries are reassessing their heavy dependence on the dollar in their international transactions and reserves. Gita Gopinath, first deputy managing director of the IMF.
In this way, the organization admits that the geopolitical tensions present in the current international dynamics They are a bad omen for the dollar, even though the currency remains dominant. «Probably because a large part of commodity trade is still invoiced and settled in dollars,» Gopinath said. All this occurs in a context where China's diplomatic and economic relations with Russia are at their best. As reported by BitcoinDynamic, during a recent meeting the presidents of China Russia, Xi Jinping and Vladimir Putin, They ratified their intention to maintain their commercial relations and to use their local currencies for them. A few days ago, the two Asian giants signed an agreement in which they reaffirm the joint decision that transactions between both countries be carried out in yuan and rubles. In fact, already 90% of payments are executed with these two currencies, as Putin admitted. That is how dedollarization is gaining ground. All this, as the BRICS bloc – a group to which China and Russia belong along with 8 other countries – is expected to advance in the development of its own currency. As reported by BitcoinDynamic, the BRICS are taking increasingly precise steps to move away from the dollar, since not only do they already carry out transactions using their local currencies, but they are also developing their payment system based on central bank digital currencies (CBDC), which They would be settled with their own stablecoins.