Group 1 - Foreign institutions have reduced their holdings in China's interbank bond market by over 300 billion yuan, with a cumulative reduction close to 290 billion yuan, primarily involving government bonds and interbank certificates of deposit [2] - The reduction is not a one-time sell-off but a gradual adjustment of positions, influenced by the changing global interest rate environment [2][6] - In contrast, foreign capital has significantly increased its net purchases of U.S. Treasury bonds, with a net inflow exceeding 300 billion dollars in May 2025 alone, pushing the total foreign holdings of U.S. debt to over 9 trillion dollars [4][10] Group 2 - China has also been reducing its holdings of U.S. Treasury bonds, with a reduction of 25.7 billion dollars in July, bringing its holdings down to 730.7 billion dollars, the lowest level since 2009 [6] - The yield on Chinese government bonds has decreased, with the 10-year yield dropping below 2%, making them less attractive compared to U.S. bonds, which have an average yield around 4% in early 2025 [6][8] - Despite the reduction in holdings, foreign investors still maintain a positive long-term outlook on China's bond market, which has a total balance of 192 trillion yuan and has seen a year-on-year issuance growth of 14% [8][12] Group 3 - The U.S. Treasury market remains the largest globally, with a circulation scale of 28.6 trillion dollars, and foreign investor demand is strong, particularly from private capital [10] - The recent financial instability in the U.S., including the collapse of Silicon Valley Bank, has not significantly shaken the confidence of foreign investors, as the Federal Reserve's interventions have stabilized the situation [12] - The reduction in foreign holdings of Chinese bonds is viewed as a normal market adjustment rather than a crisis signal, with the potential for increased foreign investment in China's bond market due to recent policy changes aimed at enhancing liquidity [14]