These articles refer to Chinese treasury bonds. I was confused at first because the Chinese government also buys a lot of U.S. Treasury bonds to use their trade surplus USDs without causing the yuan/ USD exchange rate to rise.
China’s Central Bank Hints It May Add Treasury Bond Trades to Policy Toolkit
By by Beijing Newsroom and Kevin Yao, Reuters, April 23, 2024
BEIJING (Reuters) - A senior Chinese central bank official suggested on Tuesday that the bank’s buying and selling of treasury bonds in the secondary market could be used for liquidity management and as a monetary policy tool…
China’s treasury bond market has become the third-largest in the world, and its liquidity has improved, making it possible for the central bank to carry out bond buying and selling on the secondary market, the official was quoted as saying…
Beijing plans to issue 1 trillion yuan ($138.01 billion) in special ultra-long term treasury bonds to support some key sectors.
The PBOC is not allowed to buy bonds directly from the central government and has rarely engaged in large-scale bond buying in the secondary market… [end quote]
I don’t know anything about China’s bond market. Turns out that it’s about $15 Trillion – the size of the UK, France and German bond markets combined.
The U.S. Treasury market is international and highly liquid. I wonder if the resumption of the Central Bank of China’s resumption of trading Chinese treasury bonds will have an impact on the U.S. Treasury market.
Wendy