A former advisor to the Chinese central bank, and influential economist, has called for his nation to diversify away from U.S. treasury holdings.
This comes after China cut its U.S. treasury holdings by $32.5 billion in May:
"Although assets in other currencies and forms are not an ideal replacement for U.S. Treasury bonds, diversification should be a basic principle," Yu wrote in the China Securities Journal.
"When demand for U.S. Treasury securities is strong, it's a rare opportunity for us to gradually pull back. That way, it will not have a big impact on prices and China will not suffer too much," he said.
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