China Is Pegging CNY To USD Once Again, Buying U.S. Treasuries

China Is Pegging CNY To USD Once Again, Buying U.S. Treasuries: By Katchum:
Since the European crisis, which started at the end of 2011, the Chinese have been reverting their foreign reserves policy once again.
Previously China sold their U.S. treasury holdings (TLT) to a record low of 1.1 trillion USD at the end of 2011 (Chart 1). But in 2012, China drastically changed its policy. Just as before, they are again pegging the yuan to the USD (Chart 2) by selling yuan for U.S. dollars. Currently, the exchange rate of the USD/CNY peg is at 6.3. With these U.S. dollars, the Chinese have bought record amounts of U.S. treasuries.
From 2012 onwards, China bought back U.S. treasuries from 1.1 trillion USD up to 1.18 trillion USD (Chart 1). Their level of U.S. treasury holdings is currently back to the highest level historically.

Chart 1: China U.S. treasury holdings (billion USD)

Chart 2: Exchange rate USD/CNY

If we look at the long term

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