After carefully studying the relevant data, some American media were pleasantly surprised to find that China has massively purchased U.S. bonds to the tune of $121.8 billion in the past year.

Has China stopped selling?

Throughout the last year, countries have been working hard to sell off a large amount of U.S. debt.

Japan and China, the largest creditors of U.S. debt, have each sold around $200 billion, and China's total holdings of U.S. debt have reached a new low in over a decade.

Precisely because of this, the U.S. has been frequently pressuring China, hoping that China will not sell off its holdings.

So why is the news from the American media the opposite now?

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We need to make a distinction here.

The usual talk of selling off U.S. debt refers to the U.S. Treasury bonds issued by the U.S. Treasury.

Last year, we did indeed sell off a large amount, up to $170 billion.

However, the U.S. media's claim that our country has been buying U.S. bonds does not refer to Treasury bonds but to ordinary bonds, similar to corporate bonds.

Once we understand this, we can see the fundamental difference.

U.S. Treasury bonds are essentially equivalent to U.S. dollars.

The U.S. continuously issues Treasury bonds, and the Federal Reserve continuously prints money to purchase them, so issuing more Treasury bonds is essentially printing more money.

For central banks around the world, continuously selling U.S. Treasury bonds is equivalent to reducing holdings of U.S. dollars, which is a process of de-dollarization.

Why would we buy other U.S. bonds?

There are two institutions in the U.S., Fannie Mae and Freddie Mac, which were very famous during the subprime mortgage crisis.

The $120 billion in bonds we are now buying are mainly issued by these two institutions.

The beginning of this century was a watershed for the development of agency bonds.

Before this period, the development momentum of agency bonds was still good, but after this period, the development speed began to decline, and the proportion of agency bonds in the U.S. bond market also began to decrease.

The Federal Reserve has been continuously raising interest rates recently, and the relative extra yield of agency bonds has been rising, almost doubling from its lowest point.

Therefore, our country has bought a large amount of related bonds, mainly considering the investment perspective.

Buying when these bonds are at a low price and have a high yield is probably waiting for the price to rise and then selling in the future to earn the difference.

At the same time, we have not stopped selling U.S. Treasury bonds.

It's not just China; many countries around the world are reducing their U.S. dollar foreign exchange reserves.

Now, the U.S. economic development situation has encountered problems.

The bank collapse in March and the Federal Reserve's aggressive interest rate hikes to curb inflation have also confirmed this statement.

Therefore, countries are unwilling to hold more U.S. debt.

Our country's selling of U.S. debt has also brought great benefits to our country.

Our country can reduce its dependence on foreign debt and U.S. dollars, continuously improve domestic economic strength, and strengthen the development of our country's comprehensive national strength.

On the other hand, the U.S. dollar used to be the standard currency for trade settlement, but now, in more and more cases, it is not necessary to settle in U.S. dollars, so we don't need to keep too many U.S. dollars.

Moreover, to avoid potential risks, our country plans to sell more U.S. debt as soon as possible.