China selling US treasuries is not hurting US bond market

China’s holdings of US government securities are now the lowest they’ve been 🍌in two years at just $1.13 trillion. The Chinese have been selling treasuries that they own and not buying.

Theoretically that should hurt the US bond market and cause interest rates to go up. But, so far, it hasn’t hap🦂pened. Why?

Right now ther🔯e seem to be other investors around the world who want to buy our bonds as the Chinese are selling. And that’s a good thing.

Plus, the Chinese haven’t been unloading our bonds en masse. There’s no telling if there would be enough buyers for al﷽l $1.13 trillion of the remaining bonds.

China’s pro꧒blem is: What would it do with the receipts from those sold bonds? Could the Chinese government find a safer place for its assets than in the US?