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China Sells Record Sum of US Debt Amid Signs of Diversification (www.bloomberg.com)
submitted 6 months ago by yogthos@lemmy.ml to c/news@hexbear.net
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China sold a record $53.3 billion of US Treasury and agency bonds in the first quarter of 2024, likely due to escalating trade tensions and a desire to diversify its assets. This move is raising concerns as China is a major holder of US debt and its actions could impact the US economy. Additionally, China has been increasing its gold reserves, potentially as a way to mitigate sanctions risk.

https://archive.ph/6f6XN

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[-] flan@hexbear.net 74 points 6 months ago

The american strategy here makes no sense. Who is all this for? Are american billionaires really OK with losing access to the worlds largest economy just as the population joins the right income bracket to be conusmers of american goods and technology? And are they OK with risking access to much of the rest of the world due to brutal prosecution of unnecessary wars and pissing off China?

[-] Dimmer06@hexbear.net 57 points 6 months ago

The US is ruled by the logic of finance capital because it is ruled by finance capitalists. Buy low, sell high, and let someone else get stuck holding the bag. The actual concerns of production or running a society are irrelevant because long before production breaks down the current owners have dumped their stake for a comfy profit and bought some other industry.

[-] BurgerPunk@hexbear.net 32 points 6 months ago

That really puts it in perspective. That's why their viewpoint and the narratives they push about the "booming economy" are so divorced from reality. They don't live in the same reality as us.

[-] Tankiedesantski@hexbear.net 11 points 6 months ago

Agreed. If you look at what's left of the US industrial capitalist class - Musk, Tim Cook, etc., they're still very much trying to keep the supply lines open and relationships good. But such is America now that even the industrial capitalists can't compete against the alliance of the finance capitalists and the MIC.

[-] bennieandthez@lemmygrad.ml 10 points 6 months ago

Musk was publicly begging for tariffs lol

[-] JohnBrownNote@hexbear.net 8 points 6 months ago

he's also famously a huge dumbass

[-] flan@hexbear.net 2 points 6 months ago* (last edited 6 months ago)

I am not an expert here but naively finance seems like it would be the most vulnerable to a shrinking economy. That's why I'm thinking this makes no sense because if you maintain good relations maybe you can keep the party going for another decade or two before you have to deal with reality.

[-] Sodium_nitride@lemmygrad.ml 1 points 6 months ago

A shrinking real economy is not as big of a problem for the American ruling class as you might think. Their lifestyles will remain comfortable no matter how much the economy degrades. Their only worry is maintaining power for themselves, and that requires them to make moves that are economically irrational.

[-] Dimmer06@hexbear.net 1 points 6 months ago

Maybe it's more vulnerable but by the time that's a problem the profit will already be somewhere else and then whoever gets the short end of the stick will get a taxpayer bailout as a consolation prize. They're not doing economics, they're gambling with other people's money.

[-] pumpchilienthusiast@hexbear.net 41 points 6 months ago

if they had become billionaires by their long-ranged foresight and business acumen rather than privilege, sociopathy, and sheer luck, they would probably be concerned but

[-] marxisthayaca@hexbear.net 28 points 6 months ago* (last edited 6 months ago)

they are not a single block so there's probably plenty of rancor and derision of these decisions - but with the Republican state houses repealing labor protections to the point where child labor is allowed, there's a portion of them that will benefit from the cheapening of American labor.

[-] yogthos@lemmy.ml 23 points 6 months ago

I don't get it either to be honest, it's just so utterly self destructive.

[-] bennieandthez@lemmygrad.ml 8 points 6 months ago

Its a pitiful attempt at protecting it's incompetent industries, what makes it funny is that actually competitive american industries are gonna lose the Chinese market because of this 😂

To save their weak they're sacrificing the strong.

[-] Juiceyb@hexbear.net 22 points 6 months ago

It's just the amerikkka policy of "if you can't beat them, sanction them." It's telling that the US can't get into a full on war with a developed country head to head.

[-] nat_turner_overdrive@hexbear.net 14 points 6 months ago

the US Navy basically admitted defeat by Ansarallah when the state dept started offering big concessions to Yemen in exchange for them ending the blockade

can't even win a minor naval battle against a wartorn nation without a navy

[-] Tankiedesantski@hexbear.net 11 points 6 months ago

can't even win a minor naval battle against a wartorn nation without a navy

"Sure, we had to call it quits because of Yemen's drones, but let me have a go at the world's largest manufacturer of drones. I think I can win."

[-] nat_turner_overdrive@hexbear.net 11 points 6 months ago

China has the ability to produce 8x the number cruise missiles in the entire US armory every week, so obviously we can crush them in a conflict. holden-bloodfeast

[-] Tankiedesantski@hexbear.net 12 points 6 months ago

[-] rio@hexbear.net 14 points 6 months ago

USA in WW2: liberty ships aren’t pretty but we’re making three a week.

USA in WW3: this overweight and over-engineered wunderwaffe will overcome the enemy

[-] SkingradGuard@hexbear.net 6 points 6 months ago

in WW3

agony-deep

[-] Evilphd666@hexbear.net 17 points 6 months ago* (last edited 6 months ago)

If hyper inflation decimates the dollar then $100 billion could only purchase $10 billion. It's a really hard time for their material conditions. (Now imagine the rest of us plebs who they continue to bleed dry).

[-] bennieandthez@lemmygrad.ml 16 points 6 months ago* (last edited 6 months ago)

You got it wrong.

US oligarchs are not losing access to China's market with these tariffs, they have been gradually losing it when Chinese industries started outperforming them. The purpose of the tariffs is closing the US market for China to protect their pitiful monopolies because they can't compete with chinese industries.

[-] BoxedFenders@hexbear.net 8 points 6 months ago* (last edited 6 months ago)

It's a desperation move for Biden's re-election. He is appeasing the US auto industry because he needs UAW support now more than ever thanks to utterly wrecking his chances of winning Michigan. It also endears him to Sinophobes who blame every American ill on China. He must think the effects of the inevitable trade war won't be felt until after election day because when the price of everything in Walmart doubles it will lose all support.

[-] LaughingLion@hexbear.net 7 points 6 months ago

If this is the case it's even more out of touch than I thought. The threat from China in the automobile market is their EVs, which poses a big threat to Tesla. Tesla isn't unionized. If we were to have a company like BYD start selling in the USA, they'd do like all the other manufacturers and open up a subsidiary in the USA and get a plant going here. I think the Chinese manufacturers are smart enough to work with a big union like the UAW but that's conjecture. That kind of cooperation doesn't pose a threat to the union workers as it would strengthen them but it does pose an existential threat to our ruling class. The last thing they want is a giant Chinese manufacturer coming here and working with American unions.

[-] Hello_Kitty_enjoyer@hexbear.net 4 points 6 months ago* (last edited 6 months ago)

I don't understand how anyone can still NOT understand their strategy

race over welfare. A buncha mayos with 40 mansions gotta own everything on the planet, and if not that's authoritarian. ez

[-] nat_turner_overdrive@hexbear.net 66 points 6 months ago

If I ran amerikkka I would simply not engage in economic warfare with the fastest growing economy that produces all the goods my nation requires

[-] BurgerPunk@hexbear.net 48 points 6 months ago

Yeah they're dumping bad investments. Its definitely time to cash out on the US.

[-] theposterformerlyknownasgood@hexbear.net 12 points 6 months ago

The market can stay irrational longer than you can stay solvent. And you're not going to get the markets to give uo wholesale on the notion of the USA any time soon.

[-] BurgerPunk@hexbear.net 15 points 6 months ago

No. Not until dedollarization i imagine. I'm not expecting it anytime soon, but it is sound for China to sell off US debt now while its still worth something

[-] rio@hexbear.net 6 points 6 months ago

The market can stay irrational longer than you can stay solvent but Elon dumping Tesla stock matters because he owns an enormous fraction of it.

When you’re talking about holdings of US debt the size that China holds, they are the market.

[-] theposterformerlyknownasgood@hexbear.net 3 points 6 months ago

Okay but they aren't. They're diversifying the portfolio, not dumping all their US bonds. But even were they to do so, they're not the market. Leaving aside that foreign governments like China aren't majority holders of US debt even if you add them all up, China is the second largest holder of US debt not #1 (And the UK plus any of the next like 5 other foreign government owners adds up to China)

If China were to dump us debt that would be significant, but let's not venture into the non factual

[-] rio@hexbear.net 4 points 6 months ago

Yeah ok so it’s $50bn not a liquidation, sure, but that’s not spare change in anyone’s language.

If the 2nd largest holder of US debt starts selling TENS OF BILLIONS of dollars of that debt, that’s notable.

Sure it’s like 5% of their total holdings or something like that but they’re a major player and that’s a major stake. Pretending this is equivalent to some Reddit bro using Robin Hood is asinine.

China selling this stake isn’t following or responding to the market. It’s defining the market.

[-] theposterformerlyknownasgood@hexbear.net 3 points 6 months ago* (last edited 6 months ago)

No. What's asinine is pretending that China is engaging in some sort of 4d chess move to dedollarize by selling off the majority stake in the US, when what theyre actually doing is diversifying their investment portfolio by selling a stake in US bonds equivalent to like 15% of Luxembourgs holdings or 5% of their own holdings and investing in other securities.

You compared this to Elon Musk dumping his tesla stocks. It's just not.

[-] Mardoniush@hexbear.net 43 points 6 months ago* (last edited 6 months ago)

Probably a gentle reminder to the US that if Xi really wants to press the communism button he can just call in all the debt at once and tank the world economy.

[-] Tunnelvision@hexbear.net 36 points 6 months ago

I feel like that would be the world war 3 button and not the communism button but alright.

[-] MayoPete@hexbear.net 1 points 6 months ago* (last edited 6 months ago)

Yeah but imagine how fun it will be watching Cletus with his AR-15 try to shoot down a bunch of drones.

Chinese drones go whrrrrr

[-] Evilphd666@hexbear.net 34 points 6 months ago

BDS America freedom-hater

[-] P1d40n3@hexbear.net 21 points 6 months ago

LMAO

[-] marxisthayaca@hexbear.net 21 points 6 months ago

nia-smug

[-] Zodiark@hexbear.net 13 points 6 months ago

sicko-jammin

[-] SkingradGuard@hexbear.net 12 points 6 months ago

Wait but according to the boomers in my life, Chyna bought debt to control AmeriKKKa? You're telling me that is just fear mongering nonsense? shocked-pikachu

[-] Sodium_nitride@lemmygrad.ml 7 points 6 months ago

Belgium, often seen as a custodian of China’s holdings, disposed of $22 billion of Treasuries during the period.

Belgium is a custodian of china's holdings?

[-] Pentacat@hexbear.net 3 points 6 months ago

They throw cat litter wherever the US vomits on the floor?

this post was submitted on 16 May 2024
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