Some things come as a surprise, you know? Now the biggest receiver of US debt is not Japan and United Kingdom, which we are familiar with, but our neighbor - China! This is just like the story of the "wronged head" in the mouth of the people, and today we will talk about the Tao in it
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Everyone knows that the dollar is a key to the global currency market, whether you are in a food stall in China, or in a shopping mall in New York, the dollar is almost everywhere, its use has penetrated into all aspects of our lives, at this time, if you hear that China not only bought a lot of goods outside, but also bought a large number of United States Treasury bonds at the same time, you may be a little confused and think: why do this? Is China so short of money?
In fact, no, China's purchase of US bonds is a strategic layout, just like our family's money, put in the bank to earn interest, but also have to consider diversification, first look at the situation in recent years, Japan and United Kingdom US bond purchases actually fell sharply, the upper limit of the number seems to be locked, but China did the opposite, crazy buying, became the largest buyer, bought a full 70% of the US bonds, this move undoubtedly attracted the attention of many people
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There are many reasons for this, holding U.S. bonds can enhance the security of China's foreign exchange reserves, just imagine, you have money saved in the bank, don't you want the bank to give you a higher interest? The yield of U.S. bonds is relatively high, which is much more cost-effective than storing in the bank, and then, there is a small truth, you may know - if you want to maintain and increase the value of your money, you have to diversify your investment in four places, you can't put all your eggs in one basket, and holding U.S. bonds is to make our economy more stable
Some people will wonder, then will United States default? It is almost impossible in the short term, United States the economy is large, there are many countries that use the dollar, and everyone usually believes in the "credit" of United States, otherwise, how can so many countries be willing to invest their money in United States? Investment itself comes with risks, and in the long run, US Treasury yields may fall, and the dollar may depreciate
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But we in China is not stupid to stand and wait, for a long time, China is also looking for more investment opportunities in increasing its holdings of U.S. bonds, such as increasing its holdings of gold and investing in countries along the "Belt and Road", just like when you go to the market to buy vegetables, you always want to choose a few fresh and cost-effective things when choosing, not just one, therefore, to reduce its dependence on U.S. bonds, China needs to do a lot in the future
Holding U.S. bonds is a strategic choice for China, but in the face of future challenges, China still has to be cautious, not only looking at the immediate benefits, but also considering the risks that may come with it. Each of us has our own life, and I believe that as long as we take care of it, we will be able to see the fruits of a good harvest in the future
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