China passes Japan to become US’s biggest foreign creditor again
Beijing — China purchased the most US treasuries in six years in June, vaulting past Japan as the largest overseas lender to the US government, possibly taking advantage of recent weakness in the dollar in a rising US interest-rate environment. Tuesday’s report from the US treasury department also signaled that China has steadily ratcheted up its accumulation of US government debt as it has burned far less of its forex reserves this year to defend the yuan. In 2016, China spent nearly $320bn of forex reserves in an effort to stem the yuan’s depreciation against the dollar. In the wake of tighter capital controls and a weaker dollar so far this year, China’s forex reserves, the world’s biggest, have grown in line with its treasuries holdings. In June, China’s treasuries holdings rose to $1.147-trillion, the highest level since September 2016 when it was $1.157-trillion. And in July, China’s currency reserves reached a nine-month peak at $3.081-trillion. "They may have reshuffled thei...
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