I think your question is undermining your point. It would be precisely BECAUSE they think the economy is recovering that they would buy a riskier asset. Whether they are correct or not is another question.
No, it is because when the dollar is destroyed, they will own something real.
At the beginning of the year, much of the very small uptick in real-estate sales in CA were from China buying foreclosed property.
They know our dollar is going to be worthless, so they are (de facto) buying our land cheap.
So it is your contention that purchase of US debt through the Treasury and instead buying real estate at the residential level is the prudent investment at this time ?
I would just like to note that commodities are real assets.
The “value” as it relates to any particular fiat currency may fluctuate, but the asset remains intact.
If the future outlook for a currency is gloomy, holding debt denominated in such may not be the best idea. However if the outlook is for inflation, holding real assets would be prudent.
I think China may be hedging their position, if they start selling off notes their land holdings could moderate the loss they would incur in the remaining debt.
ie ...
Chine sells notes = higher interest =lower land prices (more China buying) = more $ printed due to loss tax revenue ect .. = hyper inflation = long term win for China
China asset value intact and the evil western world in shambles.
Of course this is just the ramblings of a simple man on his first cup of coffee in the AM, so there is no warranty expressed or implied. Results not typical, ask your Doctor if this opinion is right for you.
PS .... whats up with the spell check ... anyone else notice ?