The drop in registered Chinese reserves highlights Beijing’s effort to diversify its reserves, removing them from the United States
Chinese US Treasury titles reserves have fallen below the United Kingdom for the first time since the beginning of the century, highlighting a continuous change in the management of foreign reserves by Beijing. The value of the Treasury titles arrested by China, as recorded by US banks and custodians, fell to $ 765 billion in late March, from $ 784 billion the previous month, while UK rose nearly $ 30 billion to $ 779 billion, according to data released on Friday night.
This inversion places the United Kingdom as the second largest foreign holder of US Treasury titles, behind only Japan. It is the first time since October 2000 that British titles outweigh the Chinese, and is the latest sign that China seeks to gradually diversify its assets, reducing US exposure.
“China has been selling slow but constant; this is a warning to the US,” said Alicia García-Herrero, chief economist for Natixis Asia Pacific. “The warning has been there for years, not suddenly – the US should have acted much before.”
The data will serve as a warning sign for the US government, after the news that Moody’s followed Fitch and S&P by removing the triple classification of the world’s largest economy, citing the increase in debt and deficit.
Beijing has been gradually reducing its US Treasury Titles reserves since the peak of more than $ 1.3 trillion in 2011, diversifying to other assets, such as US agencies and gold titles. Part of the fall in the value of Chinese reserves may also reflect market movements.
Analysts believe that China also has a growing portion of its American assets through outsourced custodians such as Euroclear in Belgium and Clearstream in Luxembourg, which obscures the actual level of their reserves. Luxembourg reserves remained stable in March, while Belgium’s were $ 7.4 billion from February.
The huge volume of Treasury titles detained by China is the result of a commercial surplus of decades with the US, that former President Donald Trump now seeks to reduce. But US government officials also expressed concern about selling titles by foreigners, which presses up the income and the debt refinancing.
In March, the proportion of short -term titles in Chinese reserves – the most liquid titles that can be sold more easily in times of crisis – has reached the highest level since 2009.
“Based on the visible data, there is no doubt that China has shortened its expiration of its American wallet,” said Brad Setser, expert at Council on Foreign Relations and former US Treasury employee.
The increase in registered reserves of the United Kingdom does not reflect their own reserves. Instead, analysts claim that this reflects the role of London as headquarters of international capital.
Holders in Europe include insurers, banks and custodians. Some hedge backgrounds have treasure titles and arbitration selling futures or swaps – colloquially known positions like “Basis Trades”.
Setser said the UK number “probably [reflete] An increase in securities detained by global banks, the availability of custody services in London and, potentially, part of hedge background activity. ”
Analysts claim that the data, which only show movements by the end of March, do not reflect any action taken by China after the escalation of Trump’s trade war in the so -called “Liberation Day”.
“It is possible that China has made significant changes in its reserve management in the last six weeks, which will only be clear over time,” said Setser.
With information from Financial Times*
Source: https://www.ocafezinho.com/2025/05/17/reino-unido-supera-china-e-lidera-titulos-dos-eua/
