China: United States: US debt in Chinese hands up, foreign direct investment to China down

world | Apr 17, 2012 | By Asia News

Beijing - China remains the largest holder of US debt. However, a negative outlook continues to loom over its economy. At the same time, foreign direct investment drops for a fifth straight month in March.

Beijing bought US $12.7 billion in US Treasuries, increasing its holding to US$ 1178.9 billion in February. This rise comes after China last year reduced the amount of US sovereign debt it held, the first time in a decade.

Analysts believe that the change in trend shows greater confidence in the expansion of the US economy compared to Europe. Others maintain however the two economies are closely interlinked.

Meanwhile, inbound investment fell 6.1 per cent from a year earlier to US$ 11.76 billion, the Ministry of Commerce said today in Beijing, the fifth month of decline in a row.

The negative outlook for investment is partly due to Europe's crisis but also to a stronger yuan and higher labour costs.

Other developing countries have also become more competitive than China, including Vietnam and Indonesia.

 

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