The Great Debate UK
from Reuters Investigates:
A Reuters exclusive today describes a method China used recently to hide some of its U.S. Treasury purchases - "US caught China buying more Treasuries than disclosed."
Treasury officials said they were simply modernizing outdated procedures two years ago when they revamped the rules for participating in government bond auctions.
The real reason for the change, a Reuters investigation has found, was more serious: The Treasury concluded that China was buying much more in U.S. debt than was being disclosed, potentially in violation of auction rules, and it wanted to bring those purchases into the open - all without ruffling feathers in Beijing.
Stephen Culp, Reuters graphics editor, came up with a handy visual explanation for the practice that allowed China to mask billions of dollars worth of U.S. debt purchases at auctions. China placed its bids informally through primary dealers, who then placed their bids at Treasury auctions without naming China as a customer. The Treasury outlawed the practice in June, 2009, but kept the reason for the rule-change under wraps.
- Danny Sriskandarajah is Director of the Royal Commonwealth Society. The opinions expressed are his own -
In recent years the Commonwealth has become an easily derided organisation. From its inception as a clever way of easing de-colonisation to the heady 1970s and 1980s when the association showed a radical dynamism on issues like Apartheid, the international association has shown itself to be unique and useful.