Why buy U.S. Treasury bonds, mainly because, the United States of America, a country by borrowing and consumption, at the same time, because it is the first power, the dollar has become the world's payment and reserve currency, that is, the dollar can be kept strong in the world, there are everywhere to borrow capital; and China is a large country of foreign trade and exports and manufacturing, relying on foreign trade as well as foreign investment in China accumulated a lot of foreign exchange --The U.S. dollar; then ask China holds a large number of U.S. dollars, do not buy U.S. Treasury bonds that buy what is better than U.S. Treasury bonds? First of all, China's foreign exchange reserves - the dollar is not all our own, in addition to domestic enterprises earn their own dollar foreign exchange, as well as foreign enterprises to China's investment, or their exports earned foreign exchange, as well as developed countries to our assistance, the world's major financial institutions to our loans, such as the World Bank; there are some Hot money" that only wants to make short-term gains in the country. After they enter the country, they will take the dollar to the bank to change into yuan in the domestic use, at the same time at any time may change back to the dollar to put forward the transfer to foreign countries, there is also the domestic enterprises to go to foreign countries to buy technology, equipment, raw materials, such as oil, ore, etc., are at any time the need to use the U.S. dollar, because the U.S. dollar is the world's payment currency. These foreign exchange must preserve the value of appreciation, at the same time at any time to cope with the payment, investment in U.S. Treasuries is the best channel, the U.S. Treasury liquidity is the best, the financial market is the most developed, the world's countries and financial institutions are investing in U.S. Treasuries, to put it bluntly is that you can always be in the market to their own U.S. Treasuries to cope with the use of their own cash, and at the same time there is also the interest income.
Buying stocks is too risky, vigorously go to buy commodities, China is to buy what goes up, buy its price fell wildly, buy other countries' treasury bonds, one is not as good as U.S. treasury bonds liquidity as well as low-risk, and two is likely to buy after the situation of selling.
Reducing investment in U.S. Treasuries will result in a narrower channel for investment of our foreign exchange reserves, the formation of a large amount of cash in hand, can not preserve the value of the value, while holding these cash is a cost, because of the need to pay interest. At the same time to reduce U.S. Treasury bonds, is bound to tell the world that we are bearish on the U.S. economy and government, selling U.S. Treasury bonds, resulting in a decline in the price of treasury bonds, so that we did not sell the hands of the treasury bonds have shrunk; and to combat the U.S. economy, reduce imports from us, we have a large number of foreign trade factories closed down, the workers are unemployed, the factories closed down will reduce the upstream of the use of raw materials, such as coal, electricity, petroleum, metal, cement, etc., triggering the country's economic chain reaction.