Chinese Investors Sell U.S. Assets at Record Pace
Chinese investors have sold their U.S. assets at the fastest rate in four years, according to recent data released by the Treasury Department. In August alone, China sold nearly $15 trillion worth of long-dated Treasurys, along with over $5 billion in U.S. stocks. This marks a total divestment of $21.1 billion in U.S. assets, including $1.3 billion in mortgage bonds which have become increasingly popular among Chinese institutions.
The Treasury data reveals that China has sold a staggering $235 billion worth of Treasurys since early 2022. However, economists argue that this data alone does not accurately portray the complete picture. They believe that China's holdings of Treasurys and mortgage bonds have remained relatively stable over the past eight years, largely due to the country accumulating holdings through intermediaries that are not represented in U.S. data.
Despite China's selling spree, foreign buyers overall purchased $134.4 billion in U.S. assets during August, with both Treasurys and stocks experiencing net inflows. Private buyers accounted for the majority of these purchases at $140.9 billion, while official parties, including central banks, sold $6.5 billion.
International buyers also took advantage of the rising yields on 10-year and 30-year Treasurys by acquiring a net total of $61.3 billion in long-term U.S. securities. These recent yields represent the highest levels seen in 16 years.
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