China isn’t actually selling down its U.S. Treasury holdings, according to macro strategy firm GaveKal. They’re just using different avenues to buy them. In the end they’re hooked no matter what fears investors could hold about a Chinese pullback from U.S. debt.
“We do not believe that the Chinese are dumping Treasuries,” Arthur Kroeber, managing director of GaveKal Dragonomics, a Beijing research firm, told Associated Press. “What they are doing is diversifying the channels through which they make these purchases so that it is much more difficult for the market to ascertain what they are doing.” The U.S. Treasury identifies only the country of origin of the direct purchaser of its securities. So any bonds acquired through London, for example, would show up as a sale to Britain.