Why wouldn’t China weaponise its US$760 billion Treasury holdings?
The country is the US’ second-largest foreign creditor after Japan
CHINA is done retaliating against US President Donald Trump’s exorbitant tariffs, calling the administration’s actions a “joke” that it no longer considers worthy of matching. The question now is whether President Xi Jinping will find a more potent weapon to strike back at his opponent. Beijing, on Friday (Apr 11), reiterated its vow to “fight to the end”.
One dangerous card that China’s got is its US$760 billion holdings in Treasury securities. The country is the US’ second-largest foreign creditor after Japan.
Last week, the 10-year yield jumped by 50 basis points to 4.49 per cent, the biggest weekly surge since 2001. Some of the sharpest moves were occurring during Asian hours, prompting speculation that Beijing was in the market. Will China weaponise and dump its holdings?
Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free.
Share with us your feedback on BT's products and services
