Bloomberg: China, Japan, India, and Thailand are withdrawing $7.5 trillion in investments from the United States, as Asia collectively weans off "dollar dependency."

According to Bloomberg, U.S. assets have been considered the "safest haven" for Asian countries for decades. But that perception is increasingly being challenged: Asian governments and central banks, from China to Japan to India to Thailand, have in recent years reduced their holdings of U.S. Treasuries, shifting to increased gold reserves or diversifying into foreign assets and local capital markets. (Synopsis: 30-year U.S. Treasury yields soar above 5%!) The United States has lost all its 3A credit reviews, should investors be nervous) (Background supplement: The US credit standard collapsed? In the 100 days since Trump took office, the dollar index plunged 9%, the worst record in half a century) Bloomberg pointed out yesterday (28) in an article titled "Asia's $7.5 Trillion Bet on US Assets ls Suddenly Unravelling" that US assets have long been the "safest safe haven" in the eyes of Asian governments and central banks. Whether it is the US dollar, Treasury bonds, or the US capital market, it is the first choice in foreign exchange reserves and national asset allocation. That consensus, however, is disintegrating: A growing number of Asian countries, from China and Japan to India and Thailand, are reducing their holdings of U.S. Treasuries and putting money into gold, local capital markets, or diversifying into other foreign assets. This seemingly quiet asset rebalancing could have far-reaching implications for global financial markets. China leads de-dollarization: reducing holdings of U.S. bonds and buying gold Among them, China's asset allocation shift is the most representative. Since the end of 2021, China's holdings of U.S. Treasuries have fallen from $1.08 trillion to less than $800 billion, the lowest level since 2009, according to the U.S. Treasury. This is not only a cooling reaction to the attractiveness of US debt, but also symbolizes China's accelerated strategic transformation of "de-dollarization". At the same time, gold has become the new favorite of China's foreign exchange reserves. Since the end of 2022, the People's Bank of China has increased its holdings of gold reserves for 18 consecutive months, becoming one of the largest gold purchasers among the world's major central banks. ANZ pointed out that this shows that the Beijing government is taking a more active approach to internationalizing the renminbi and hedging geopolitical risks. However, experts also analyzed that China's move is not purely economic. Bloomberg quoted strategists from Gavekal as saying that China's gradual reduction of U.S. debt is to avoid political risks such as asset freezing, reflecting the consideration of "protecting sovereignty" rather than simply pursuing returns. Asian central banks shift to local and multi-asset In addition to China, other Asian countries have seen similar shifts. Although Japan remains the second-largest foreign holder of U.S. debt, its central bank is increasingly cautious about investing in overseas assets. Both the central banks of Thailand and India continue to reduce their U.S. debt ratios and diversify their funds to other currencies and assets. Emerging Asian markets such as India and Indonesia are strengthening their local capital markets to attract both domestic and foreign investment in their bond and equity markets. This would both reduce dependence on dollar assets and increase the independence of its own financial system. Bank Indonesia has publicly stated that the establishment of a "reliable local capital market" is one of its policy priorities. U.S. assets may face stress tests This wave of asset reallocation may bring structural shocks to global markets. Specifically, it could include: First, weaker external demand for U.S. Treasuries could push up borrowing costs for the U.S. government and lead to increased interest rate volatility. If Asian buyers stop being stable buyers, the U.S. bond market will need to rely more on domestic investors or other regional funds in the future. Second, the dollar's position could be challenged. Although the US dollar still accounts for more than 60% of the world's reserve currencies, the continued trend of diversification and de-dollarization may put pressure on the US dollar exchange rate. Especially in the context of the rising confrontation between the United States and China and the intensification of global financial fragmentation, the political risks of asset allocation have increasingly become a consideration for central banks. Finally, the influence of geopolitics and international relations on the direction of investment is increasingly apparent. The friction between China and the West has made China more inclined to embrace gold and non-dollar assets; The US foreign sanctions and asset freeze cases have also prompted many countries to re-examine the sovereign security of assets. Asia is collectively bidding farewell to "dollar dependence" This collective asset rebalancing of Asian central banks is not a temporary phenomenon, but a structural transformation. Craig Chan, strategist at Nomura Securities, pointed out: "This is not a complete withdrawal of Asian bonds from US bonds, but a structural adjustment, a fundamental change in the logic of Asian investment." For global financial markets, this represents the beginning of a new chapter: international financial flows, once dominated by U.S. assets, are gradually shifting to a more multipolar and geopolitically sensitive pattern. While U.S. assets remain attractive, the "safest" status is being challenged like never before. 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