Time to reduce dollar's hold
By Giles Chance | China Daily | Updated: 2013-10-14 06:32
United States government shutdown could cost China dearly: Experts
China holds a significant portion, about $1.1 trillion, of its foreign reserves in debt issued or guaranteed by the US government. As the US' largest foreign debtor, China has every right to be concerned about the US government shutdown that started in Washington on Oct 1 and which shows no sign of ending.
After a short period of calm, debt markets started to show signs of nerves on Oct 5, with short-term US borrowing of one month's maturity offering a significantly higher yield than a week earlier. The increased return on short Treasury bills was necessary to persuade investors to lend money for one month to the US government.
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