Unwinding of US debt securities of Chinese

[mrEngineer]

Hi all,

Some of us may be aware that Chinese has started to take action to try to unwind their US debt holdings and decided to invest outside of China which is very unlike of their past behaviour. My question is how can we profit from this trend? Should we invest in Chinese companies (state-owned) while they acquire foreign assets or should we purchase their targets instead?

[Zelphon]

Where would the Chinese invest???

I suppose in TAIWAN...

They have a strategic interest to take back TAIWAN and one of the easiest way is simply to buy the whole island back !!!!!

Buy up all the blue chips and gain a strong ownership of Taiwan companies...

[newborn1000]

hmmmmm......sometimes they invest nt really for profits, eg oil.........

Even if TS know which are their targets, e Chinese gov usually gets a discounted price from e market or has some clause to fall back on........eg, If stock XX falls by 10%, gets to buy more or convert at another price.....

[mrEngineer]

Haha. The story I get for now is that they are flexing their financial muscle and willing to pay to even for negative IRR just to get assets.

[sgd]

if chinese and japanese are no longer buying means fed have to buy means QE3 is coming.

If nobody buy US treasuries incl fed don't buy means there will be a run on bonds, run on bonds means all banks finance inst will start pulling money off the market, naked shortist will have great day.

[corydorus]

I know that China has been reducing their purchase in US debts. Not sure is same as unwinding.

[sgd]

the japanese have a good reason to unwind, they been hoarding a mountain of us treasuries for rainy day and such a day has now come, instead of issue more debt they could sell maybe 30% to raise the 260billion needed to pay for reconstruction.

Of course to do something like could strain ties with americans at a time when they are hocked to their eyeballs deep in debt and still coming with hat in hand