Not all bonds issued abroad are denominated in the legal tender of the issuing country. For example, Britain may issue bonds denominated in dollars or bonds denominated in pounds. Bonds issued by other countries held by China should be purchased with China's foreign exchange reserves. As for the currency used, we should not only look at which country the bonds are issued, but also analyze the specific bonds.

Generally speaking, the government will set up a sovereign investment fund company to buy American bonds on behalf of the country. So the company buys directly and the government buys indirectly. China's foreign exchange reserves bought the shares issued by these sovereign investment funds. As for the sources of foreign exchange reserves, there are many sources, but one of them is the exchange of foreign exchange for export, and the export commodities can obtain foreign exchange. At the same time, we implement foreign exchange control, so the foreign exchange directly exchanged in China is equivalent to our passive issuance of RMB. On the other hand, these foreign exchanges are concentrated in the pool of foreign exchange reserves.