In recent years, with the continuous growth of China's economic size, the friction in the Sino-US economic and trade field can be described as increasingly fierce. Recently, an announcement from the US Department of the Treasury has unveiled the mysterious veil of international capital flows for several months of this year.
According to this heavy "International Capital Flow Report," the global pattern of holding US Treasury bonds is quietly changing.
As an important holder of US debt, China has actually reduced its holdings by more than 5460 billion US dollars in a row. While selling US debt, the renminbi has risen against the trend, seemingly realizing Bill Gates's prophecy.
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Why do China and other countries in the world reduce their holdings of US debt in large amounts? What is Bill Gates's prophecy?
China and Japan are on the same path, reducing US debt
Among many countries, Japan still sits firmly in the first place of overseas holders of US Treasury bonds, with a scale of US Treasury bonds held as high as 111 billion US dollars. However, in terms of development trends, Japan has actually maintained the same tacit understanding with China and has begun to gradually reduce its holdings of US debt.
Although China is still in the second place, our country has reduced the holdings of 821.8 billion US dollars in our hands for four consecutive months, allowing our country's holdings of US debt to fall to the lowest point since 2009.
This reveals a subtle change, which may be China's thoughtful consideration of new changes in the global economic pattern and a fine adjustment of its own asset allocation.
At the same time, traditional US allies such as Luxembourg and Belgium also followed closely, with the figure of selling US Treasury bonds in the market.This series of data not only reflects the latest trends in global capital flows but also foretells the possible future direction of the international financial market.
Despite the official data from the United States still painting a picture of tranquility, claiming that overseas bond returns are growing steadily, market confidence has subtly changed. The former glory of U.S. debt has dimmed, and investors are increasingly turning to short-term bonds, holding a reserved attitude towards the long-term outlook of the U.S. economy.
Especially the actions of China and Japan in reducing their holdings have stirred ripples in the global financial community. In the future, the path of U.S. debt may be full of thorns, and the challenges are becoming increasingly severe.
As a staunch ally of the United States, Japan should theoretically support the U.S. by increasing its holdings of U.S. Treasury bonds. Why would Japan refuse to take over when the U.S. economy is in crisis?
In fact, in recent times, due to global financial fluctuations, the Japanese yen has also been severely affected. Since April, the yen has depreciated significantly, becoming a significant hidden danger for the Japanese economy. To stabilize the yen's exchange rate, the Japanese government has intervened three times. The Japanese authorities may have sold U.S. Treasury bonds to exchange for precious U.S. dollar funds to help stabilize its exchange rate market.
But apart from this reason, the continuous expansion of the U.S. Treasury bond scale and the gradual downward trend of the U.S. economy have also forced the Japanese government to face the huge amount of U.S. debt in its hands. Once the U.S. economy collapses, the most severely impacted will definitely be Japan, the largest creditor.
And China, as the second-largest holder of U.S. debt, has also quietly reduced its holdings by more than 500 billion U.S. dollars. And judging from the current trend, this trend may continue.
As a major economy in the world, in order to achieve diversification of foreign exchange reserve asset allocation, China has been committed to increasing the proportion of gold and other precious metals in recent years. China's reduction of U.S. Treasury bonds is precisely to reduce the potential risks of China's economic development, diversify risks, and enhance the security of assets.
I believe that with the subtle changes in Sino-American relations and the continued trend of diversification of China's foreign exchange reserve asset allocation, the scale of China's holdings of U.S. Treasury bonds is expected to gradually decrease. Although recently, the price of gold has repeatedly hit new highs.The US dollar, deeply tied to gold, still retains a certain appeal, but China's firm determination to reduce its holdings of US debt and optimize the structure of its foreign exchange reserves will not change as a result.
In this world-class financial game, China is writing its own financial legend with a steady pace and flexible strategy.
The fact that can fully prove this is the counter-trend appreciation of the renminbi in recent months.
Counter-trend appreciation, Gates' prophecy.
At the end of July this year, the exchange rate of the renminbi against the US dollar experienced a surprising fluctuation, and both the onshore and offshore markets staged a thrilling rise.
In the onshore market, the exchange rate of the renminbi against the US dollar was like a runaway wild horse, once soaring more than 680 basis points, reaching the highest point of 7.1972. In the offshore market, under the promotion of international investors, the appreciation of the renminbi was also astonishing. Under the attention of the world, the renminbi rose by nearly 600 basis points, directly pushing the exchange rate to a new high of 7.1930.
On this day, the renminbi stood out among Asian currencies and became the focus of everyone's attention. Its counter-trend rise is not only a change in numbers but also the result of the interweaving of complex economic factors behind it.
The counter-trend appreciation of the renminbi is not only a strong response to the recent market sentiment but also a precise capture of the subtle changes in the global economic pattern.
All of this reflects the dim light of the US economic data.
According to relevant news, the United States is currently experiencing a wave of unemployment. The number of people applying for unemployment benefits for the first time in the United States continues to set a new high, and its manufacturing index continues to decline, all telling the difficulties faced by the US economy.These unfavorable factors for the economic development of the United States ultimately act like huge boulders, weighing down the US dollar index and making it hard to breathe, paving the way for the rise of other currencies.
In such a context, the globally renowned chip company "NVIDIA" has proposed to provide a "special supply version chip" for China, attempting to re-enter the Chinese market.
Previously, the United States tried to completely block Chinese technology by banning the sale of chips to achieve its own goals. However, China not only did not experience economic fluctuations as a result, but also went further and further on the road of self-developing chips.
Seeing that the Chinese market might be lost, "NVIDIA" has made such an embarrassing move, hoping to minimize losses as much as possible.
The emergence of this phenomenon seems to have inadvertently confirmed Bill Gates' prophecy: "If the United States insists on blocking chips to China, it is very likely to help China complete chip self-development in the end!"
In fact, Chinese companies have not fallen into a trough because of the United States' technological blockade against China. Instead, they have started to invest in chip research and development with all their might under this pressure, trying to achieve the goal of self-sufficiency.
However, American companies that are the blockaders have been greatly impacted and are extremely eager to re-enter the Chinese market. This is obviously a huge difference from the expectations of the United States, which also fully proves the strong self-motivation of the Chinese economy.
Looking forward to the future, the trend of China's economy may still be full of variables. But no matter how bumpy the road ahead is, it will continue to shine on the global economic stage with a more determined pace!
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