Skip to main content

The Whole Story About China Being The Biggest Foreign Owner Of US Debt Is On The Verge Of Going Away


DEC. 19, 2013, 4:02 PM 

Business Insider/Matthew Boesler (data from Bloomberg)

Since 2008, China has been the largest foreign holder of U.S. government debt.

According to the latest data available, China's portfolio of U.S. Treasuries totaled $1.305 trillion at the end of October, just shy of the $1.315 trillion peak value registered in July 2011.

In recent years, this development has become increasingly salient in the U.S. political arena.

However, China's position as America's largest creditor could be eclipsed in 2014, according to George Goncalves, head of fixed income strategy at Nomura.

In his year-ahead outlook, Goncalves advises clients to consider such a "tail risk" scenario.

"As Japan’s [quantitative and qualitative easing] worked its way to foreign bonds with a 1-year lag, Japanese investors could be forced to seek higher yields overseas,"
writes Goncalves. 

"In our opinion, Japan’s foreign bond buying may just enable it to overtake China as the top foreign holder of USTs, especially if/when China continues to diversify its holdings away."

In a speech last month, People's Bank of China deputy governor Yi Yang declared it "no longer in China’s favor to accumulate foreign-exchange reserves."

Yi's comments triggered speculation that China will become less of a source of foreign demand for Treasuries going forward.

"They are probably going to keep their allocations reasonably stable unless there's a big policy shift, but it means they will possibly be buying less at the margin," Sacha Tihanyi, a senior currency strategist at Scotiabank, told Bloomberg News.

Japan, on the other hand, is executing on the massive quantitative easing program it began earlier this year. Though smaller in absolute terms than the Federal Reserve's balance sheet expansion, Japan's bond-buying efforts are larger in terms relative to the size of its economy. Naturally, the effect of the program has been to suppress yields on Japanese government bonds.

The idea is that Japanese investors, starved for yield they can't get from JGBs, will turn to U.S. Treasuries, which have become an attractive investment following a 130 basis-point rise in yields this year.

Japan's portfolio of U.S. Treasuries was valued at $1.174 trillion at the end of October, so it still has a $131-billion gap to fill. 

Nonetheless, it remains a key potential development to watch out for in 2014.

Read more:

Popular posts from this blog


While "Flavor" is very subjective, and each country that grows mangoes is very nationalistic, these are the mango varieties that are the most sought after around the world because of sweetnesss (Brix) and demand.

The Chaunsa has a Brix rating in the 22 degree level which is unheard of!
Carabao claims to be the sweetest mango in the world and was able to register this in the Guiness book of world records.
Perhaps it is time for a GLOBAL taste test ???

In alphabetical order by Country....



Alphonso (mango)
From Wikipedia, the free encyclopedia

Alphonso (हापुस Haapoos in Marathi, હાફુસ in Gujarati, ಆಪೂಸ್ Aapoos in Kannada) is a mango cultivar that is considered by many[who?] to be one of the best in terms of sweetness, richness and flavor. 

It has considerable shelf life of a week after it is ripe making it exportable. 

It is also one of the most expensive kinds of mango and is grown mainly in Kokan region of western India.

 It is in season April through May and the fruit wei…

INDIA 2016 : Mango production in state likely to take a hit this year

TNN | May 22, 2016, 12.32 PM IST

Mangaluru: Vagaries of nature is expected to take a toll on the production of King of Fruits - Mango - in Karnataka this year. A combination of failure of pre-monsoon showers at the flowering and growth stage and spike in temperature in mango growing belt of the state is expected to limit the total production of mango to an estimated 12 lakh tonnes in the current season as against 14 lakh tonnes in the last calendar year.

However, the good news for fruit lovers is that this could see price of mangoes across varieties decrease marginally by 2-3%. This is mainly on account of 'import' of the fruit from other mango-growing states in India, said M Kamalakshi Rajanna, chairperson, Karnataka State Mango Development and Marketing Corporation Ltd.

Karnataka is the third largest mango-growing state in India after Uttar Pradesh and Maharashtra.

Inaugurating a two-day Vasanthotsava organized by Shivarama Karantha Pilikula Nisargadhama and the Corporation at P…

Mangoes date back 65 million years according to research ...

Experts at the Birbal Sahni Institute of Palaeobotany (BSIP) here have traced the origin of mango to the hills of Meghalaya, India from a 65 million year-old fossil of a mango leaf. 

The earlier fossil records of mango (Mangifera indica) from the Northeast and elsewhere were 25 to 30 million years old. The 'carbonized leaf fossil' from Damalgiri area of Meghalaya hills, believed to be a mango tree from the peninsular India, was found by Dr R. C. Mehrotra, senior scientist, BSIP and his colleagues. 

After careful analysis of the fossil of the mango leaf and leaves of modern plants, the BISP scientist found many of the fossil leaf characters to be similar to mangifera.

An extensive study of the anatomy and morphology of several modern-day species of the genus mangifera with the fossil samples had reinforced the concept that its centre of origin is Northeast India, from where it spread into neighbouring areas, says Dr. Mehrotra. 

The genus is believed to have disseminated into neighb…