An earlier version of this story said China sold nearly $15 trillion in long-dated Treasurys. They sold nearly $15 billion.
Chinese investors sold U.S. assets at the fastest pace in four years in August, according to official Treasury Department data released Wednesday evening.
China sold nearly $15 billion in long-dated Treasurys in August, along with more than $5 billion in U.S. stocks. All told, Chinese institutions and funds sold $21.1 billion in U.S. assets, including $1.3 billion mortgage bonds, which they have recently favored over Treasurys, the data showed.
The selling comes as China’s currency, the yuan
USDCNY,
-0.01%,
has neared its weakest level against the U.S. dollar since late 2007. It also coincides with reports from Bloomberg News in August that Chinese authorities instructed state-controlled banks to intervene to support the yuan. Typically, when this happens, China sells dollar-denominated assets and uses the proceeds to buy yuan.
According to the Treasury data, China has sold $235 billion in Treasurys since early 2022. However, one economist has calculated that these data don’t tell the full story. He found that China’s overall holdings of Treasurys and mortgage bonds have changed little over the past eight years, as they’ve increasingly accumulated holdings via intermediaries that aren’t attributed to China in U.S. data.
See: Reports that China has been dumping Treasury bonds have been greatly exaggerated
All told, foreign buyers bought $134.4 billion in U.S. assets in August, as both Treasurys and stocks saw net inflows. Of this private buyers bought $140.9 billion, while official parties, often central banks, sold $6.5 billion.
International buyers also bought on a net basis $61.3 billion in long-term U.S. securities, indicating that they took advantage of rising yields on 10-year
BX:TMUBMUSD10Y
and 30-year Treasurys
BX:TMUBMUSD30Y.
Yields on both have recently marched higher to their highest levels in 16 years.
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