Chinese Bond Auction FAILS, As Investors Bet On Rate hike

Chinese Bond Auction FAILS, As Investors Bet On Imminent Rate Hike -> businessinsider.com/chinese- … ids-2010-4

Can anyone explain to me why China would need to sell bonds at all? As a gigantic net exporter, holder of immense US treasuries, supposedly enormous foreign exchange reserves, and it’s own currency, why does it need a piddling 28 billion yaun bond issue??
en.wikipedia.org/wiki/List_of_co … e_reserves

to sterilise its dollar holdings. The CB sells Yuan bonds to mop the excess yuan issued to buy dollars earned by exporters. Otherwise excess yuan causes inflation. Problem is yuan IR are higher than dollar IR so negative carry etc

Perhaps, because all isn’t as it seems with the economy of the country …

Blue Horseshoe