This is determined by our national conditions. China implements the system of compulsory settlement and sale of foreign exchange. Foreign investment, foreign trade, personal remittance and other foreign currencies must be converted into RMB with domestic banks when remitted to China. That is, foreign currencies such as US dollars must be taken to the bank to be converted into RMB for domestic use or deposited in the bank; Then there will be more and more foreign currency in the bank, so it is necessary to preserve and increase the value of foreign capital. The United States and other countries are world powers, and the national debt issued by them has high security and stable income; So let's buy these bonds!

Huge foreign exchange reserves

Benefits: it shows that there is a huge trade surplus, and it attracts a lot of foreign capital, and the economy keeps growing; Can withstand the impact of the external environment!

Disadvantages: Under the great pressure of local currency appreciation, it will attract a lot of hot money into speculation, leading to overheating of the economy and rising prices.

References:

Please indicate the source of the old uncle's works in cornfield!