Research note by ANZ's head of Asia research, Khoon Goh
He says that China will "naturally" see a slowing or outright halt in US debt buying in 2018 particularly if authorities continue to refrain from active FX intervention.
In the note, he cites that China has been reducing US debt holdings since its FX reserves peaked in 2014, with capital outflows during 2015 - 2016 the notable intense period. And he says that Chinese authorities have largely refrained from active FX intervention in 2017, allowing the CNY to be more market-determined - a trend that he likely sees this year as well (I think he's forgetting a bit on the "counter-cyclical factor" being removed here).
Lastly, he notes that US Treasuries will likely remain the largest holdings in China's FX reserves and it is the world's largest and most liquid debt market - and that it is not beneficial for China to trigger a sell-off in the US debt market.
