China raised its massive US government debt holdings for the first time in six months in March amid soaring foreign bond purchases on the back of European debt concerns, official data showed on Monday.
The Chinese government, the top holder of US government debt, raised its long-term Treasury holdings to US$895.2 billion, up US$17.7 billion from February, the US Treasury Department said in its latest monthly report on global capital flows in the world’s largest economy.
The last time China increased its bond holdings was in September.
China had cut its massive US Treasury bond holdings to the lowest level in at least nine months in February as Beijing resisted persistent US pressure to revalue its currency.
Net foreign purchases of US long-term securities leaped to a record US$140.5 billion in March from US$47.1 billion in February, the Treasury data showed, amid mounting concerns about the Greek sovereign debt crisis.
“Motivated by safe-haven concerns and worries about the Greek debt crisis, private foreign investors increased their purchases of US Treasury bonds and notes, government agency bonds, and even private corporate bonds,” said Tu Packard, a senior economist at Moody’s Economy.com.
“This not only is a strong vote of confidence in the US economy, but also speaks volumes about the extent of investor unease with policy management of the European sovereign debt crisis and the implications for the world economy,” Packard said.
Japan, the world’s second-largest economy and the number-two holder of Treasuries, increased its holding to US$784.9 billion from US$768.5 billion, Treasury International Capital (TIC) data showed.
Britain, the third-biggest holder, also was a net buyer, bumping up its holding to US$784.9 billion from US$768.5 billion in February.
“Most of the demand for Treasuries came from the private sector as foreign central banks bought dollars at a far more modest rate. This suggests that private investors began to move money into the safety of US dollars in March,” said Kathy Lien, research director at Global Forex Trading.
News of the record amount of demand for US dollar-denominated assets in March came as the euro sank to a four-year low against the dollar on Monday amid concerns about sovereign debt problems in Europe.
The strength of the demand for Treasuries suggested that “the April and May data could be even stronger as central banks increase their pace of diversification out of euros,” Lien said.
Michael Woolfolk at Bank of New York Mellon said the TIC data bode well for the budding US recovery from the worst recession in decades.
“These are positive developments for the funding of the US trade deficit and support for the dollar,” he said.
The Treasury report came amid US and international pressure on Beijing to revalue the yuan and ahead of key bilateral talks next week.
RETHINK? The defense ministry and Navy Command Headquarters could take over the indigenous submarine project and change its production timeline, a source said Admiral Huang Shu-kuang’s (黃曙光) resignation as head of the Indigenous Submarine Program and as a member of the National Security Council could affect the production of submarines, a source said yesterday. Huang in a statement last night said he had decided to resign due to national security concerns while expressing the hope that it would put a stop to political wrangling that only undermines the advancement of the nation’s defense capabilities. Taiwan People’s Party Legislator Vivian Huang (黃珊珊) yesterday said that the admiral, her older brother, felt it was time for him to step down and that he had completed what he
Taiwan has experienced its most significant improvement in the QS World University Rankings by Subject, data provided on Sunday by international higher education analyst Quacquarelli Symonds (QS) showed. Compared with last year’s edition of the rankings, which measure academic excellence and influence, Taiwanese universities made great improvements in the H Index metric, which evaluates research productivity and its impact, with a notable 30 percent increase overall, QS said. Taiwanese universities also made notable progress in the Citations per Paper metric, which measures the impact of research, achieving a 13 percent increase. Taiwanese universities gained 10 percent in Academic Reputation, but declined 18 percent
CHINA REACTS: The patrol and reconnaissance plane ‘transited the Taiwan Strait in international airspace,’ the 7th Fleet said, while Taipei said it saw nothing unusual The US 7th Fleet yesterday said that a US Navy P-8A Poseidon flew through the Taiwan Strait, a day after US and Chinese defense heads held their first talks since November 2022 in an effort to reduce regional tensions. The patrol and reconnaissance plane “transited the Taiwan Strait in international airspace,” the 7th Fleet said in a news release. “By operating within the Taiwan Strait in accordance with international law, the United States upholds the navigational rights and freedoms of all nations.” In a separate statement, the Ministry of National Defense said that it monitored nearby waters and airspace as the aircraft
UNDER DISCUSSION: The combatant command would integrate fast attack boat and anti-ship missile groups to defend waters closest to the coastline, a source said The military could establish a new combatant command as early as 2026, which would be tasked with defending Taiwan’s territorial waters 24 nautical miles (44.4km) from the nation’s coastline, a source familiar with the matter said yesterday. The new command, which would fall under the Naval Command Headquarters, would be led by a vice admiral and integrate existing fast attack boat and anti-ship missile groups, along with the Naval Maritime Surveillance and Reconnaissance Command, said the source, who asked to remain anonymous. It could be launched by 2026, but details are being discussed and no final timetable has been announced, the source