China has dropped 97% of its holdings in U.S. Treasury bills, ” decreasing its ownership of the short-term U.S. government securities from a peak of $210.4 billion in May 2009 to $5.69 billion in March 2011, the most recent month reported by the U.S. Treasury ” according to CNS News.
This is a shocker, but not surprising considering today’s job numbers and the direction the economy has been going since Team Obama took over. The U.S. economy is literally in shambles, a fact that hasn’t gone unnoticed by China.
Obamanomics has brought us unsustainable debt, a Depression (yes, that is the operative word) with 14 million unemployed. China is flexing its economic muscle. Beijing has lost confidence in American economic policy along with 65% of this country’s citizens.
China’s concerns with our economy began 18 months ago. The following is from an article written in February 2010 in guardian.co.uk.
US treasury figures for the period ending in December 2009 show that, following the sale, China is no longer the largest overseas holder of US treasury bonds. Beijing ended the year sitting on $755.4bn worth of US government debt, compared to Japan‘s $768.8bn.
Since the sub-prime crisis that began on Main Street USA grew to engulf the global economy, China’s leaders have repeatedly expressed concerns about US policy. December’s $34bn sell-off made only a tiny dent in Beijing’s total holdings of US assets, which amount to well over $1tn when stakes in American companies, as well as treasury bills, are taken into account.
But the news intensified concerns about China’s appetite for bankrolling ever-widening American deficits. Premier Wen Jiabao told reporters last year: “We have made a huge amount of loans to the United States. Of course we are concerned about the safety of our assets.”
America must sell an unprecedented volume of treasuries in the coming years to finance its record deficit, and pay the cost of bailing out Wall Street and kick-starting the economy with a $900bn stimulus package. Any evidence that foreign investors are beginning to doubt Obama’s promises to bring the public finances under control will spread alarm in Washington.