FX.co ★ China sells record amount of dollar assets

In an effort to diversify away from American assets, Chinese authorities decided to offload their vast holdings of US Treasury bonds. According to Bloomberg, China sold a record $53.3 billion worth of Treasuries and agency bonds in the first quarter of 2024.

The Asian nation was not alone in this endeavor. Belgium, often seen as a custodian of China's holdings, also got rid of $22 billion of Treasuries in the first three months of the year.

Earlier, the Chinese government expressed its intention to diversify its reserve holdings away from their dollar-denominated assets. According to analysts, China may accelerate efforts to sell American securities as trade worries resurface.

Tensions between the world's two largest economies are escalating. The fragile peace between Washington and Beijing is at risk. The current policies of US President Joe Biden, particularly a sharp increase in tariffs on various Chinese imports, could spark a new conflict. Even a newly elected president may not soften the situation, experts assume. After all, billionaire Donald Trump, Biden's main rival in the upcoming presidential election, has also pledged to slap a 60% tariff on Chinese products.