China Returns As Net U.S. Treasury Buyer

A new report from the U.S. Treasury called the Treasury International Capital Report is showing that, at least for now, China (and other nations in total) remains a net buyer of U.S. Treasury debt.  In the month of April, foreigners were net buyers of longer-term U.S. securities.

Treasury debt held by China rose by $1.5 billion to $1.146 trillion. This may not sound like much, but it is important because China was a net seller of Treasury debt to the tune of about $11.2 billion.  This is no ‘back to normal’ yet for China but it is still showing that the U.S. may be the least ugly debtor in a world of deadbeats.

Japan reduced its holdings again but remains very high with over $1.06 trillion in total Treasury holdings.

One key issue is that foreign investors as a total purchased a net $37.26 billion in April, and that is before the global concerns really started to grow in May.  March’s net foreign buying of Treasuries was $20.09 billion.

The United States gets to keep financing its deficits with foreign capital.  For now.

JON C. OGG