China sells US bonds to 'show concern'

A decision by China to reduce its US Treasury holdings suggests concern about the US attitude towards its economic woes, Chinese economists were quoted as saying in state media Wednesday.

The remarks, coming after US data showed a modest decline in Chinese investments in US government bonds, were in contrast to an earlier statement in Beijing which had said the recent sell-off was a routine transaction.

"China is implying to the US, more or less, that it should adopt a more pragmatic and responsible attitude to maintain the stability of the dollar," He Maochun, a political scientist at Tsinghua University, told the Global Times.

According to US Treasury data issued Monday, Beijing owned 763.5 billion dollars in US securities in April, down from 767.9 billion dollars in March.

My Commets: It’s interesting that this comes after the BRIC nation summit. With Russia exiting bonds and now China slowly moving away this must have been a discussion at the summit. However, the amount of bonds reduced was very, very small and seems more like a financial “warning shot across the bow”. But this is creating a dangerous trend…

Full article here…