🇨🇳🇳🇱🇩🇰🇺🇸 China’s years-long retreat from US treasuries flags bigger risks

The slump in treasuries after China’s latest call to curb its holdings was fleeting, but it put a spotlight on Beijing’s decade-long shift from US debt and rekindled fears about a broader, global retreat.

For China, regulators have grown worried that large holdings of US government debt may expose banks to sharp swings. Officials advised financial institutions to limit purchases and instructed those with high exposure to pare down their positions, Bloomberg reported, citing people familiar with the matter.

China’s record US$1.2 trillion (RM4.71 trillion) trade surplus is driving the buying spree. Instead of bringing the export earnings onshore, companies and banks have increased their purchases of overseas assets to capture higher returns.

Such large exposure to dollar assets would give pause to Chinese policymakers as the US and China have been locked in heightened geopolitical tensions, according to Stephen Jen, co-founder of London-based Eurizon SLJ Capital.

“The whole idea of lending to the government of your primary adversary should no longer be welcomed in Beijing,” he said.

China’s latest warning comes weeks after Trump’s threat of acquiring Greenland rattled markets anew in January.

That month, AkademikerPension, a US$25 billion Danish pension fund, announced it was exiting the US$100 million it had held in US treasuries, while Dutch fund Stichting Pensioenfonds ABP said it had reduced its holdings of treasuries by about €10 billion (RM46.69 billion) to €19 billion in the six months through September.

Outside Europe, India’s holdings have dropped to a five-year low as the nation pushed to support its currency and diversify reserves. Brazil’s long-term treasuries holdings have also declined.

“The broader trend is clear,” said Damien Loh, chief investment officer at Ericsenz Capital in Singapore. “Non-US entities, both sovereign and corporate, are moving to reduce their overweight positions in US assets, particularly treasuries.”

While foreign holdings of treasuries hit a record US$9.4 trillion in November, the share of the total debt is smaller — reflecting that their purchases haven’t kept up with the growth in US government borrowing. Overseas investors now hold about 31% of the total, compared to roughly 50% at the beginning of 2015.

🔗 https://theedgemalaysia.com/node/792643

🇺🇸⚔️🇮🇷 U.S. Navy Carrier snapshot.

Despite the U.S. Navy possessing 11 aircraft carriers, the U.S. Navy can send only two carriers to CENTCOM for operations against Iran at a short notice:

🔶 the USS Gerald R. Ford, currently deployed in the Caribbean Sea

🔶 USS George Washington deployed at the US Navy base in Yokosuka, Kanagawa Prefecture, Japan.

All other carriers are either undergoing maintenance or in the process of being retired.

USS Nimitz (CVN-68), the oldest of the carriers, is set to retire this May after 50 years of service, which will put the number of active-duty carriers at 10

The US Navy should have received by now the USS John F. Kennedy (CVN-79) but the carrier's construction was marked by delays which pushed its delivery date to March 2027.

@CIG_telegram

🇺🇸⚔️🇮🇷 USAF strategic transport flights to and from Europe and the Middle East in the last 24 hours.

6x C-5Ms
28x C-17As

🔗 Evergreen Intel

🇮🇷❌🇯🇴🇺🇸🇮🇱 Iranian medias published a video threatening to destroy Jordan's Muwaffaq Salti Air Base which was heavily fortified by the U.S. these past weeks with several MIM-104 "Patriot" and THAAD batteries, on top of the deployment of several F-15E Strike Eagle fighter jets.

During the 12 Day War, Jordan shot down Iranian projectiles headed for Israel although Jordanian politicians have stated that they will not allow the use of their airspace by Israel or the U.S. to attack Iran.

6 USAF F35As took off from RAF Lakenheath earlier today and will in the coming hours at Muwaffaq Salti Air Base.

@CIG_telegram

🇺🇸🇸🇾🇯🇴 The U.S.-led International Coalition has fully withdrawn from the Al-Tanf base on the Syria–Iraq–Jordan border, SOHR sources say, ending years of military presence.

🔗 Mintel World

🇺🇸⚡️ — A high-energy laser system was tested near El Paso during today's recent brief airspace shutdown, which stemmed from disagreements between the Federal Aviation Administration and Pentagon officials over drone-related exercises, according to CBS News.

➡️ The Pentagon had been planning counter-drone operations near Fort Bliss, located next to El Paso International Airport, using military technology to detect and disable unmanned aircraft. The system involved was a high-energy laser designed to identify and neutralize aerial drone threats.

➡️ Earlier this week, anti-drone systems were activated near the southern border after objects believed to be foreign drones were detected. Sources later said at least one of the targets turned out to be a party balloon, which was shot down.

➡️ Mexican cartels have recently been operating drones along the border, though it remains unclear how many were intercepted by the military’s counter-UAS technology. One official said at least one cartel-linked drone was successfully disabled.