China cut its stockpile of US Treasuries in March, before its trade war with US President Donald Trump escalated, stepping aside from its position as the No 2 overseas holder.
As foreign holdings rose for a third straight month to an all-time peak of US$9.05 trillion in March, China’s stockpile slid to US$765.4 billion, down US$18.9 billion from the previous month and ending an upswing in holdings in the January-February period, according to data released by the US Department of the Treasury on Friday.
One reason it’s important is because changes in the amount of dollars outside of the US changes the value of the US in exchange of other currencies. As long as the debt is USD-denominated, the US government can always pay it back with the result of the USD value changing (probably depends on volume, speed, and many other variables).