China believes in the U.S. economy

China and U.S. are friends again

In brief: The warming of relations between China and the U.S.. Analysts believe that the return of confidence in relations of super will help the U.S. economy.

A year after the fiscal policy of the United States was named by the Chinese authorities “irresponsible”, the PRC leaders are showing greater confidence in the methods of doing business in the U.S. economy. China increased the amount of U.S. Treasury bonds bought by 2,6% to $ 900.2 billion in March and April, after the reduction of stockpiles of these securities at 6.5% in the period from November to February, which was the longest monthly decline over the past ten years.

The People’s Bank of China also said that several weaken the yuan. Regardless of the national currency, China will remain a net buyer of U.S. debt, according to George Gonsalves (George Goncalves) investment bank from Nomura Holdings Inc. Buy China $ 22.7 billion in Treasury bonds during March and April contributed to an overall increase in foreign securities, available in reserves from the Chinese Central Bank, a $ 205 billion is the biggest jump since June-July 2009. In this case, made in recent months have focused on the acquisition of long-term bonds, in contrast to 2008 when most of the funds was spent on treasury bills. Over the past 12 months, total investments in treasuries rose by 18%, including in the securities with a maturity of 2 years or more – by 46%. Buying long-term securities, China is helping keep U.S. interest rates near record lows, helping to hold U.S. companies and private citizens.

Ukrainian Globalist
2010-06-21 09:50, Economics.

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