Recently there have been news items about how China has limited its purchase of US Treasuries. Also that it has started purchasing Japanese JGB's and Korean and Malaysian Ringgit Bonds. To the best of my knowledge foreigners are not allowed to buy Chinese government yuan bonds.
On the face of it this is a prudent diversification move on the part of the asset managers who manage China's $ 2.5 trillion in reserves. However if I was into conspiracy theories, I would say that China is using its reserves to drive up the yen and won making it more difficult for the Japanese and Korean companies to compete against Chinese companies.This will also allow China to lets its currency appreciate a bit to take the heat off.
Perhaps too simplistic a view ?
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