China’s holdings of US Treasuries were valued at $1.17 trillion by July after the country increased its holding for six consecutive months to become the largest foreign holder of US Treasuries, according to statistics recently released by the US Treasury Department.
China’s increased holding of US Treasuries is a reasonable choice, as China’s trade surplus continued to expand and its foreign reserves rose this year, said Zhang Yongjun, a researcher at the China Center for International Economic Exchanges.
In addition, experts are making a bullish bet that the US dollar could get rid of its weakness in the second half of 2017.
Zhang noted that the US dollar is expected to increase in value after undergoing depreciation since this year. Therefore, purchasing dollar-based assets at a relatively low price point now could bring profits later.
While investment behavior is influenced by many factors, China will still choose to slightly increase its holding of US Treasuries if its trade surplus continues to expand, the expert added.
This article was originally published in Huanqiu.
