China US debt holdings reach US$1.305tn in October

China increased its holding of US bonds by US$10.7 billion to US$1.305 trillion in October. A financial expert said the surge of net capital inflow in October suggests that the demand for US debt is still healthy despite concerns about potential defaults, reports the financial news website of Chinese web portal Tencent.

Investors feared US debt may lose its prominent market status in early October when the US government shut down for 16 days due to a disagreement on the borrowing limit and its lawmakers debated a spending bill. “It is encouraging to see there is still-healthy demand at a time when there was concern about a US debt default,” said US research and strategy director Millan Mulraine at TD Securities.

Foreign buyers sold US$97.6 billion of US bonds and stocks in September but bought US$194.9 billion in October. The capital outflow in the US reached US$106.8 billion in September but capital inflow in the country in October increased on a scale that was the largest monthly increase since the US$272.9 billion inflow in October 2008, when investors around the world turned to US assets to avoid the global financial crisis.

Full article: China US debt holdings reach US$1.305tn in October (Want China Times)

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