China's drop in US Treasury holdings may reflect a reroute through Canada and Belgium — Canada on track to become a top-three holder
Key Facts The multi-month decline in China’s official US Treasury holdings may not represent active selling by Beijing, according to Fortune, the Globe and Mail and the South China Morning Post on October 18. Some of the holdings may have been relocated through custodial and intermediary accounts in Canada and Belgium, allowing exposure to Treasuries to be maintained while reducing the visibility of official holdings. Market participants note that Canada may, on a statistical basis, displace China as one of the top three holders of US government debt. If confirmed, the picture would materially shift the narrative around Treasury demand structure, the trajectory of US–China financial relations and the medium-term rebalancing of global foreign-exchange reserves. ...