China sold over $109 billion worth of US bonds in the first half of 2020 as the digital yuan launch nears – a report by Sahil Kohli.

China has sold over $109 billion worth bonds in the first half of 2020 as the People's Bank of China nears the launch of its centralized digital yuan.

China is likely to reduce its holdings of US Treasury bonds to just under $800 billion from the current level of more than $1 trillion, according to the local news outlet Global Times. The main reason for the reduced exposure is the record amounts of the US dollars being printed by the country’s Federal Reserve, leading to fears among investors and central banks of imminent inflation. Another reason being US President Donald Trump’s repeated attacks on the Chinese administration, the report said. 

 

China is the world’s second-largest holder of US debts.

The Asian country is currently the world’s second-largest holder of US debts, but the Asian country has been reducing its holdings of US bonds in recent years. In the first half of this year alone, China sold an estimated $106 billion worth of US bonds, which is a 3.4% decline compared to 2019. The professor at the Shanghai University in China, Xi Junyang, said that China is on track to reduce its holdings of US bonds from $1 trillion to $800 billion. But he added, “China might sell all of its US bonds in an extreme case, like a military conflict.” 

 

The launch of China’s national digital currency nears. 

The central bank has been working on the national digital currency for a long time and is now close to launching, Sahil Kohli reported. China’s central bank is planning to use the national digital currency dubbed DCEP at the 2022 Winter Olympics Game that will take place in Beijing, China. Sun Guofeng, an executive at the central bank, noted that the digital currency’s exact launch date is unclear as of now. However, Guofeng said that the country is likely to roll it out before the 2022 Winter Olympic Games as they plan to use it during the sports event. 

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Jai Pratap
Jai Pratap
A Mass Media Graduate who loves to write. Jai is also a sports enthusiast and a big movie buff. He loves to learn new things.

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