Mainland China has reduced its holdings of U.S. debt for the third consecutive month, and Japan, the largest creditor, suddenly shifted

Recently, the People’s Bank of China has been reducing its holdings of U.S. debt while increasing its holdings of gold. This move has caused many self-media accounts in the market to proudly exclaim that “China is attacking the United States.” These remarks make people laugh. You must know that as long as the U.S. dollar remains the most important currency in the world, U.S. debt will still be the most liquid asset. The central bank’s previous large allocation of U.S. debt also illustrates this point. Recently, it has begun to reduce its holdings of U.S. debt for the sake of the yuan. The exchange rate is stable, and the RMB has experienced a sharp depreciation in the past year. After continuously reducing its holdings of U.S. debt in the past few months, it can be seen that the RMB exchange rate has indeed stabilized. After the RMB exchange rate is normalized in the future, the central bank may still purchase additional U.S. bonds.