Fed Forced to Cut Rates, China Sells $26B in US Debt
According to relevant reports, on September 19th, the United States released its liquidity report for July of the year 24.
The report indicated that China reduced its holdings of U.S. debt to $3.7 billion in July, approximately 26 billion yuan.
The subsequent interest rate cut by the United States led to consecutive sales of U.S. debt by China, Japan, the UK, and France.
At this critical moment, the United States also sent high-level officials to visit China.
What was the purpose of this visit to China?
On September 19th of the year 24, reports about the Federal Reserve were released, astonishingly revealing that the interest rate had been cut directly to 50 basis points.
This interest rate cut was the first in 20 years.
Subsequent reports suggested that the Federal Reserve hinted at further rate cuts in the coming year, also by 50 basis points.
This rate cut successfully attracted public attention, raising suspicions about whether there were hidden conspiracies behind the reduction in the base rate.
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Another concern was the situation of U.S. national debt.
According to reports, both China and Japan reduced their holdings of U.S. debt in July of the year 24.
The report also included data showing that in July of the year 24, the U.S. debt held by other countries' investors reached a new high.
China's holdings of U.S. debt decreased to $3.7 billion in July, equivalent to about 26 billion yuan in RMB.
It should also be noted that China's foreign exchange reserves, compared to June, were on the rise, increasing by 1.06%.
This data clearly indicates that China's foreign exchange reserves have remained above the trillion-dollar mark for seven consecutive months.
According to the relevant departments, in July of the year 24, the U.S. dollar was less popular in the market, showing a downward trend, while China was essentially unaffected, maintaining steady development.
In addition to China, Japan's U.S. debt also decreased, with relevant data showing a reduction of $2 billion month-on-month.
Despite the significant reduction, Japan remains the largest holder of U.S. national debt.
According to relevant data, in July, foreign holdings of U.S. debt reached a new high, with six out of the top ten U.S. debt holders choosing to reduce their holdings after receiving the news, while the other four countries maintained their previous strategy of increasing their holdings.
The most eye-catching was the Cayman Islands, which significantly increased their holdings of U.S. debt in July, with funds reaching $58.7 billion, a growth figure far exceeding other regions.
The release of this news allows people to have a clearer understanding of the situation of U.S. debt holdings by various countries.
There have been previous reports that the United States would send high-level officials to China for talks.
According to the reports, this plan was successfully carried out as the fifth meeting of the economic working group established by the two governments last year.
The establishment of the working group was mainly to strengthen communication between the two economic systems on a global scale, including personnel from the Federal Reserve.
The report also included these points: regarding the issue of channels, Shang Bo stated in a statement that communication with officials involves a common cognitive field between the two parties.
Although there may be disagreements in this field, flexible channels are still needed.
China and the United States have had trade relations for a long time, and there are significant disagreements between the two countries.
In May of the year 24, there were reports on related content.
Trade relations between countries are involved, but the trade between the United States and China is a tense existence.
In May of the year 24, the United States imposed new tariffs on China, mainly targeting electric vehicles and semiconductors, directly increasing tariffs by 25% to 100%.
The purpose of this action is very clear, which is to stifle Chinese enterprises.
Similar to September, during that period, they conducted a visit to China, claiming to resolve overcapacity, but this was just an excuse.
The main purpose was to investigate the situation for the tax increase.
Regarding the tax increase, China provided a reasonable explanation at that time, but the United States' attitude remained to increase tariffs without any change.
These actions by the United States are entirely driven by typical protectionism.
Their reason for increasing taxes is entirely due to their own declining production capacity.
In order to protect their own national interests, they attempt to suppress Chinese industries by increasing taxes, which to some extent draws attention to the related industries in the United States.
In fact, it is not the first time that the United States has increased taxes on Chinese goods.
Five years ago, they increased taxes on Chinese steel and aluminum, but such actions did not enhance the competitiveness of related industries in the United States and were futile.
The United States' approach is seen as foolish by the outside world because the development of information in the world is very rapid, and the speed of understanding related information is very fast.
It is impossible to isolate any country on the path of development.
A country that suppresses others will soon face the same result.
In the past five years, the United States has increased tariffs, but it is the American consumers who have paid the bill for these decisions.
The United States has also encountered unprecedented high inflation in 40 years due to such actions.
The consequences of high inflation are also very serious.
In the provincial capital in 23, due to the interest rate relationship brought by high inflation, it directly triggered the bankruptcy of Silicon Valley Bank.
Therefore, the United States is facing a dangerous situation.
The United States cited overcapacity as the reason, but China started from the actual problem.
There will be no such problem in the issue of new energy.
What exists is only the excessive sales of new energy.
From an international perspective, this is not a problem at all.
The United States' actions are entirely bullying.
In response to some actions by the United States at that time, relevant companies will take active measures.
From this matter, it can be seen that in addition to improving their own capabilities, it is necessary to grasp the legal and trade weapons at the right time to further ensure their own safety.
There is a big contradiction between the United States and China.
According to relevant reports, in order to squeeze out Chinese enterprises, the United States actually lobbied hard in other countries.
According to relevant personnel, in January of the year 24, the United States began holding meetings with Vietnam, and the main content of the meeting was to hope that Vietnam would avoid cooperation with Chinese communication companies.
According to relevant personnel, such actions by the United States are entirely destructive.
What is most surprising is the following statement.
The United States relies on its strength and uses all kinds of means to prevent Vietnam from cooperating with China.
However, a project not only compares quality but also needs to compare prices.
The price offered by China is very low.
The main reason for the United States to adopt such a strategy is that this enterprise has posed a threat to the United States.
Therefore, it exerts pressure on this enterprise from the beginning, directly suppressing it, and does not give it the opportunity to cooperate with other countries.
In this way, the only beneficiary can be the United States.
With the rise of China, many goods have been exported, and the strength has been greatly improved.
Faced with unfair events, there is its own way of handling.
The United States hopes that there will be no other events and conspiracies behind the visit to China.
If the United States wants to improve its relations with China, it cannot target China on some issues.
Only cooperation can achieve a win-win situation.
Many people still hold a wait-and-see attitude towards this interest rate cut and U.S. debt operation by the United States.
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