First of all, let's be clear. Why did China buy so many treasury bonds is because our country is too rich to buy US treasury bonds with domestic wealth. First of all, we should know which countries in the world buy US dollar bonds, which are basically big international trading countries, especially big countries with trade surpluses with the United States, such as China and Japan. Surplus refers to the fact that the export volume is greater than the import volume, but China's products are mostly low-value products, which is the embodiment of China's current technological manufacturing capacity. The main problem of excessive trade surplus is excessive foreign exchange reserves. Since RMB is not the loan currency in the world at present, the settlement of international trade is mainly in US dollars, euros and Japanese yen. Foreign exchange reserves can only be obtained from internationally accepted currencies such as the US dollar, the euro and the Japanese yen (at present, China is negotiating with neighboring countries to settle in RMB, but the scale is not large). In this way, it is self-evident whether a country's foreign exchange reserves are paid by the banks of the currency country, or whether it is cost-effective to buy the national debt with relatively high returns and less risks guaranteed by the Ministry of Finance of the currency country.

Secondly, talk about why foreign exchange reserves are needed, whether foreign exchange reserves are equivalent to the money of ordinary people in China, and whether the state can distribute them to ordinary people. The settlement of international trade needs foreign currency, and foreign enterprises export to China in foreign currency (US dollars). Enterprises in China (many of which are also foreign-funded enterprises with factories in China) also need foreign currency after export (for example, US dollars. As mentioned above, RMB is not a freely circulating and world-wide currency, so many countries use foreign currency for settlement at present). As China's exports increase, more foreign exchange flows into China. China's financial control policy (preventing hot money from entering China and protecting China's financial industry) will lead to a financial crisis. ) Enterprises are not allowed to leave too many dollars. It is stipulated that the US dollars recovered by enterprises after export shall be recovered and managed by Chinese banks. When enterprises need funds at home, they need to convert them into RMB for enterprises to use, and the government forms foreign exchange reserves through foreign currency purchased and managed by banks. Enterprises can only use RMB in China. When an enterprise needs to import products in foreign currency, it applies for the use of foreign currency, and the bank pays the foreign currency it manages and the foreign currency converted by the enterprise through RMB to the foreign enterprise. Therefore, foreign exchange reserves consist of surplus foreign currency purchased by the government and part of foreign currency controlled by the government. These foreign exchange reserves are necessary for international trade. According to the demand for foreign exchange, the state will invest the temporarily unused funds appropriately, such as buying the national debt of the United States, Japan, the European Union and other countries. What is often needed can only be deposited as temporary funds in banks with foreign currency deposits, because foreign exchange entrusted to enterprises also needs to pay interest. Because the exchange rates of national currencies change in international trade, in international trade settlement, each country will store the currencies used by both parties for settlement to partially resolve exchange rate risks. Therefore, I understand that foreign exchange reserves are not equal to the money of the people of China and the money of the government of China, but the money of the government is the investment income!