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Week In Review

Post-coronavirus economic realities begin to surface

On June 2, MarketWatch reported that “China is now the No. 2 holder of Treasurys at $1.08 trillion, down from its 2014 high of $1.32 trillion… China sold $8 billion of US government bonds in March, when overseas investors and central banks got rid of $300 billion of Treasurys that month to raise dollars.”

Since 2018, economists have speculated whether Beijing will use its holdings of US bonds as economic leverage against Washington.

In March 2020, South China Morning Post flaunted the idea of Ren Zeping, an economist who worked for leading Chinese property developer Evergrande, that “China should sell US government bonds and cut holdings of dollar-denominated assets. Instead, China should buy gold, oil, natural gas, iron ore, land, farm products as well as stakes in hi-tech firms on a massive scale.”

On June 6, Asia Times Financial reported that “international holdings of Chinese bonds passed a significant milestone this month of 110 billion yuan ($15.5 billion) in May, despite global tension and volatility. Chinese bonds are increasingly becoming an attraction for foreign institutional investors.”

Post coronavirus global economic order is likely to showcase unexpected economic maneuvering by world powers as the status of the US empire is declining.

Trump’s dogmatic policy to unnecessarily pressure China is likely to create additional hurdles for the declining US empire.

Courtesy: MarketWatch, Asia Times Financial.

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