Tuesday, March 13, 2007

What China does with its trade surplus proceeds

Brad Setser has provided a wealth of detail in one of his latest posts called "Just what is in China's portfolio?"...some key items:

-"China has roughly $100b in U.S. mortgage backed securities"

-"China holds $600b in Treasuries...$350b of Treasuries and $250b of agencies is, well, $600b."

The Chinese government is essentially fairly exposed to the issues with mortgage lending that are now coming to light and causing problems in the financial markets, in my view.

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