[dan-robertson]

I mostly agree.

I’m not sure I’d call it ‘rent seeking’. China needs forex reserves like a lot of countries and China is big so it’s reserves are big. It’s just that it is generally more convenient but basically equivalent to hold treasuries instead of dollars if you have an enormous amount of money. Doesn’t eg Japan also hold a bunch of treasuries for similar reasons?

[AYBABTME]

I'm no expert on this topic. My perspective is simply that it's against a debt holder's interest to have the debt's underlying asset (currency) devalued. It's much better if the debt holder gets their interest payments (the "rent seeking" part) against an asset that has a stable equivalent monetary value (in term of purchasing power). Especially when we talk of currency, since the interest payment is made... in the currency that would be devalued. Basically, China is long on the USD.