On Labor Day, Reuters ran the story that China's Ministry of Finance is planning to issue (sell) bonds in their sovereign yuan currency, to raise as much as $100 billion yuan, the equivalent of $14.64 billion.
The move comes as China presses ahead with internationalizing it's yuan. China has already allowed some foreign banks to sell yuan-denominated bonds, and launched a pilot program to allow companies to settle imports and exports in yuan.
In a separate report by another English paper, China is reported to be alarmed by the US printing money to buy US Treasury debt, which could cause inflation and a decline in the value of the USD. A top member of the Chinese hierarchy, Mr. Cheng, said if there is a serious devaluation of the USD, it could compel China to redesign its foreign reserve policy.
He said most of the Chinese Reserves are in US bonds, over $2 trillion, and China would need to diversify into euros, yen, and other currencies. "Gold is definitely an alternative, but when we buy, the price goes up. We have to do it carefully so as not to stimulate the markets," he added.