Chinese Academy of Social Sciences Experts: Chinese investment in the United States bond yields close to zero!

Federal Reserve (Fed) HKNPL want to buy one trillion U.S. debt rescue the market, will affect China's two trillion near the huge foreign exchange reserves, Chinese Academy of Social Sciences, Institute of Finance, Director of the Center for Chinese Economic Evaluation of Liu Yu-hui said that at present the United States bond yields close to zero, so China's U.S. dollar assets investment risk can not be underestimated.

In the United States assets of 1.4 trillion U.S. dollars
"Time Weekly" reported that at 1.95 trillion U.S. dollars in China's foreign exchange reserves, the share of dollar assets by about 70%, or nearly 1.4 trillion U.S. dollars, one of the United States treasury bonds for 727.4 billion U.S. dollars, the United States accounted for 23.6 percent of total government bonds, The United States accounted for 6% of external debt. Chinese buy another "two rooms" bonds 376,000,000,000 U.S. dollars, together with other agencies a total debt of about 510.6 billion U.S. dollars, in addition to investment companies in the United States financial institutions, equity investment over 13 billion U.S. dollars, while the SAFE foreign investment more than 90 billion U.S. dollars. Second half of last year, China surpassed Japan to become America's largest creditor.
U.S. Treasury Department information shows that Chinese investment in the United States is not conservative, even radical significantly. From the look in January, the United States long-term government bonds to buy 5.05 billion U.S. dollars, sold 4.428 billion U.S. dollars; buying agency debt 2.607 billion U.S. dollars, sold 4.428 billion U.S. dollars at the United States ...... Chinese investors on the financial markets are extremely active.
Data from January, the Chinese hold to the "two rooms" based agency debt up to 510.671 billion U.S. dollars, representing a 9 at the end of 2008 the 525.331 billion U.S. dollars is only a decrease of 2.8%. This shows that the United States National credit, are really worthless.
Chinese financial markets in the United States active not only in bonds, the high-risk stock market is also doing my part. According to U.S. Treasury data, 2007 at the end of the 6 Chinese holders of the stock assets of the United States was only 28.519 billion U.S. dollars, by 6 at the end of 2008 reached 99.548 billion U.S. dollars. In the following Lehman Brothers bankruptcy triggered the United States stock market fell in a row, did not significantly reduce, to the one at the end of this year, remains at 99.178 billion U.S. dollars to maintain the huge positions.
Stock investment losses
Such a big risk exposure, the investment carrying huge losses, has been an open secret, and the Earth people are aware the United States the Dow since last September has dropped around 40%.
People in the industry have said that in the past 10 years, the State Administration of Foreign Exchange Management of foreign exchange reserves of the overall profitability of the general. Apart from a few years ago, a slight balance, the most years in the relative devaluation of state assets. Especially since last year, the United States economic recession cause substantial depreciation of U.S. dollar assets exist substantial risk, making SAFE volcanoes such as sitting.
British "Financial Times" quoted the United States Committee on Foreign Relations, Brad Sezer economists estimate that 15% of the investment in accordance with the terms, including "two rooms" and other agencies debt, equity investment, these assets initially investment capital has approximately 250 billion U.S. dollars, with the present rate of depreciation of the stock look, there may be 80 billion U.S. dollars of floating loss. However, for this kind of message did not respond to the SAFE. In fact, the SAFE faces difficult choices. SAFE in the past year the proportion of the assets of the currency adjustment, the euro has not only failed to rise, but relative to the dollar, some depreciation of the currency conversion by the loss of reserves. Reuters said that hedge funds demand and reflux the United States dollar became the financial crisis, one of the strongest currencies, partly due to the U.S. dollar led to the devaluation of non-US dollar assets, China's foreign exchange reserves in January for the month drop in 2000 probably has a single the highest month on record.
In addition, SAFE has also carried out the stock and bond investment, through its institutions in Hong Kong, including the purchase of Total, BP, including some of the energy company's stock and corporate bond holdings of these shares, however, allegedly until the "two room" when the bond was hosted by the stop.
The above-mentioned people in the industry said that the principle of the SAFE assets under management are safety, liquidity, hedge against inflation. Currently, apart from the three objectives of this mobility, the other two are faced with enormous challenges.
The United States bond yields close to zero
Chinese Premier Wen Jiabao at the United States worried about the safety of the assets, Obama said swore at ease. However, the United States Government is committed to the security, rather than yield. Investment security is at the United States national credit guarantee, but the investment earnings rate, but only the market to answer it.
"At present the United States bond yields close to zero, the future of interest rates high pressure makes Impairment of Assets." Chinese Academy of Social Sciences, Institute of Finance, Director of the Center for Chinese Economic Evaluation of Liu Yu-hui said that the risk of U.S. dollar assets should not be underestimated, regardless of the future How interest rates can only be upward, it highlights the risk of long-term debts. At the same time, short-term debt bubble components is relatively large.
Liu Yu-hui that the current United States, Europe's benchmark interest rates have reached zero interest rate or zero interest rates to move, either as government bonds or corporate bonds, fixed income products that tend to bubble. Credit throughout the United States to create mechanisms to a standstill, and nothing to show for financial institutions, the market's long-term interest rates have remained high.

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