China Allegedly Hiding US Debt Holdings in Canada

• •China may be routing US Treasury holdings through Canada, with Canadian banks holding nearly $600 billion.
• •Reported decline in China's US Treasury holdings may reflect a shift in custody rather than actual selling.
• •No direct evidence links China to the increase in Canadian holdings, leaving the situation speculative.

Recent reports suggest that China may be routing its US Treasury holdings through Canada, with Canadian banks reportedly holding nearly $600 billion in US government debt. This increase in Canadian holdings coincides with a reported decline in China's direct holdings of US Treasuries, raising suspicions that China is shifting its investments rather than selling them. Analysts believe this strategy allows China to mask its financial ties to the US while still supporting American deficits. The claims remain unconfirmed, and there is no direct evidence linking China to the surge in Canadian holdings. The situation highlights the complexities of US Treasury data, which records securities by the country where they are held, not by the ultimate owner. As of now, the lack of official confirmation from either Beijing or Ottawa leaves the matter speculative.