US corporations hold a portion of these Treasury securities to park their overseas profits there to avoid US income taxes.
China unloads, Euro Area loads up: The Euro Area – which includes the three financial centers Luxembourg, Belgium, and Ireland – has been purchasing Treasury securities on a large scale over the years. The Euro Area now holds nearly twice as much as China and Hong Kong combined.
Over the past 12 months through April, the Euro Area added $295 billion, bringing its total holdings to a record of $1.88 trillion at face value.
Over the past 12 months, China and Hong Kong added $7 billion, despite shedding some securities in March and April. Over the long term, they have been reducing their holdings of Treasury securities. At the end of April, their total holdings were $1.0 trillion, down by 31% from 2015.
