The «Tengnuo» strategy guides the caution reduction of US bonds, prioritizing gold. China explores global markets and limited use of Bitcoin to avoid financial control. On the global board, China moves its pieces with stealth, looking for check to the King dollar. In such a way that, with more than 3 billion dollars in reservations, Beijing rethinks its dependence on the American treasure bonds, while the policies of the president of the United States, Donald Trump, and the shadow of the sanctions imposed by his country redraw the rules of the financial game. It is the defolarization that is charging a new impulse, resonating in the corridors of Chinese power, where it is seen as an act of survival, assembling a shield for the dollar, which can be used as a weapon. The State Administration of Foreign Exchange (SAFE), is the brain behind the management of these Chinese reserves that amount to 3.2 billion dollars, one of the largest in the world. So, Supervised by the Popular Bank of China, the entity manages assets As United States Treasury bonds, agencies bonds, gold and, to a lesser extent, private investments. Safe's mission includes regulating the currency market, protecting reserves against geopolitical risks, such as sanctions, and diversifying assets to balance safety, liquidity and profitability. And to achieve it, at present, it is appealing for the «Tengnuo» strategy, that is, agile maneuvers on a tightrope with which it guides its disdoring effortsas explained in a recent article by Financial Times. In itself, its strategy implies a cautious but dynamic approach to balance liquidity, security and profitability in the management of China's foreign reserves, especially in a context of diversification to reduce dependence on the US dollar. In such a way that its dependency of bonds issued by US companies, two mortgage giants sponsored by the US government, in favor of safer and more diversified alternatives. In particular, China's gold reserves have grown up to 6% of the total, with an 18% increase since 2022, positioning the precious metal as a shelter against the instability of the dollar. This reflex turn Beijing's search for assets less vulnerable to financial policies from Washington, in a context of growing geopolitical tensions.
China focuses on various strategies to achieve disdain. Source: X/Sputnik Int.
Bitcoin: A safe step towards diversification
At the same time, SAFE intensifies its investments in global markets outside the US, channeling funds through key financial centers such as Hong Kong. Entities such as Huaxin in Singapore, Huaou in London, Huamei in New York and Hua'an in Hong Kong have facilitated the acquisition of shares, loans and other assets in coins other than the dollar, strengthening China's financial presence in regions such as Asia, Europe and Latin America. In addition, although in a limited way, Safe can be using bitcoin For international transactions, taking advantage of its decentralized nature to avoid control of the US financial system. While the use of this digital currency is marginal, it represents a complement to China's diversification strategy, which seeks alternatives to the domain of the dollar in global trade. This is aligned with its «Tengnuo» strategy, which reflects a delicate balance. That is, aggressively diversifies their financial reserves without causing a more severe reaction in Washington, which could further complicate their access to US markets. We must consider that, despite its efforts, China faces obstacles in its attempt to diversify its investments within the US through Rosewood Investment Corp, Safe explores US private markets, including real estate and data centers, strategic sectors with high growth potential. However, the Trump administration has intensified surveillance about these incursions, citing concerns about Chinese influence on critical industries. These restrictions have limited China's capacity to increase their exposure to assets related to the American real estate market. As cryptonoticia recently reported, Chinese local governments have been selling confiscated cryptocurrencies, including an estimated 15,000 bitcoin, valued at approximately 1.4 billion at the end of 2023, through private companies in offshore markets, despite the prohibition of digital asset trade in continental China. In addition, it is believed that China could have liquidated up to 194,000 Bitcoin, seized of the Ponzi Plustoken scheme in 2019, with an approximate value of 20,000 million. These funds, transferred through exchanges like Huobi, could be being used to reinforce the country's gold reservesthat have grown substantially in recent years. The sale of Bitcoin confiscated to probably buy gold, would allow China to strengthen its reservations, while sending a message about its distrust of decentralized digital assets such as Bitcoin, which are difficult to control and are subject to US surveillance in global financial markets. Although China would be using Bitcoin in a limited way for international transactions that evade American control, their gold preference reflects a long -term strategy to reduce the influence of the dollar and prepare for possible economic conflicts, such as those derived from Trump administration's protectionist policies.