China says no plan to reduce U.S. Treasury purchases

Yesterday, we noted a Bloomberg report that indicated some senior Chinese government officials had recommended “slowing or halting purchases of U.S. Treasuries.” Today, the State Administration of Foreign Exchange (SAFE) published a brief note (in Chinese) on its website denying there was any planned change.

• SAFE says it only learned of the supposed plan through media reports, blaming them on “erroneous information sources” (错误的信息来源 cuòwù de xìnxī láiyuán) or “fake information” (假消息 jiǎ xiāoxī).
• China holds $1.2 trillion of the $14 trillion market in T-bills, according to official data, but the Financial Times says (paywall) some analysts “believe that the country also owns several hundred billion via other financial centers.”

• “Officials may have leaked the information as a warning to the Trump administration that Beijing could retaliate” against trade pressure, according to speculation by “some fixed-income strategists,” as reported by the FT.
• Even if it does happen, some commentators doubt it will affect the demand for U.S. treasuries — “First, I don’t think it’s relevant, second, I don’t think it’s going to happen,” one economist told CNBC. “There’s plenty of buyers.”
• Still, some investors are “spooked” at the prospect of reduced demand for T-bills, says (paywall) the New York Times.

Losing female reporters

Mei Fong is the author of One Child: The Story of China’s Most Radical Experiment, former Beijing correspondent for the Wall Street Journal, and previous Sinica Podcast guest. She has written an op-ed for the New York Times (paywall) in reaction to the BBC’s China editor Carrie Gracie resigning from her post, citing pay inequality with male colleagues. Titled “What we lose when we lose female reporters,” Fong argues that, questions of fairness aside, “the case for equal pay is the case for better reporting… Our understanding of China would be hugely diminished without the contribution of many outstanding female correspondents.”