U.S.-China Ties Grow Stronger, If Only in the Bond Market
China’s record sale of dollar-denominated debt suggests a limit to tensions between the countries.
Are the U.S. and China on the brink of a cold war? Follow the money.
Photographer: Paul Yeung/BloombergThose who fear an impending cold war between the U.S. and China need only look to the bond market to see evidence of a potential thaw.
In the midst of a holiday-shortened week for American markets, China easily sold a record $6 billion of dollar-denominated bonds, accumulating $20 billion of investor orders that allowed it to tighten yield spreads for a lower borrowing cost, Bloomberg News reported. While hardly unexpected — this is the third straight time the country has borrowed in the U.S. currency around this time of year — it nevertheless sends a clear signal to global investors that the ongoing trade dispute with the U.S. isn’t going to stop China from integrating itself and local issuers into worldwide financial markets. And it likely suggests a limit to how far any sort of lasting tensions between the two largest economies can go.