Last week, I looked at a chart done by the Congress Research Service that showed a decline of 3 % in mainland China's holding of our debt between 2011 and 2015. I have said a number of times that China listens to things people say about them and they try to make themselves look better. They don't necessary change their position, but they do change tactics to counter criticism.
But, I was looking at this Panama Papers fiasco in light of how leaders could potentially abuse shell companies to make things look better for them too. As it turns out, the percentage of debt held outside the U.S went up in the categories of debt held by Caribbean Banking Centers and Hong Kong by almost the same amounts it declined in China. Maybe we should be looking at debt held by them and the beneficial owners of that Treasury debt to see if China really did reduce its holding of US debt. Maybe they just shift it to some shell companies.
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