Yesterday’s TIC report for November has been variously reported in the media. The FT’s headline ran China and Russia main sellers of US Treasuries. This report struck me as strange, because it is well known that the Chinese do a good deal of their buying through indirect channels (if only Brad Setser was still blogging on this). Indeed, this seems likely to have happened on this occasion, with China selling $11.2bn of Treasuries but the UK, for example, buying $33.3bn.

Bloomberg backs up my initial thought on this. Its headline simply reads International Buying of Long-Term US Assets Climbs More Than Estimated, which neatly summarises the real story, and the article contains this quotation:

“China seemed to reduce their Treasury bond holdings by about $11 billion, but as we have noted flows could go through a different financial center, like London,” said Marc Chandler, global head of currency strategy at Brown Brothers Harriman.

Conclusion: there is no reason to worry about whether the Chinese have stopped buying treasury bonds.