China increases US Treasury bond holdings

• Source: Global Times
• [19:19 November 18 2009]
• Comments

Until the end of September, China held $798.9 billion in US treasury bonds, up $1.8 billion compared with the $797.1 billion at the end of August, according to the figures released by the US Treasury Department Tuesday.

By the end of September, China continues to be the biggest holder of US debt.

But China's holdings of US debt have been fluctuating in the past six months, according to previous figures from the US Treasury Department. China increased holdings of the national debt increased by $23.7 billion, $38 billion and $24.1 billion in March, May and July respectively, while China cut US dollar holdings by $4.4 billion, $25.1 billion and $3.4 billion in April, June and August respectively.

Although China has cut holdings three times in six months, industry insiders believe that since the US’ economic position and the dollar's position did not change much, and the liquidity of the US debt is good, so China's large investment in US treasury bonds will continue for a long time.

Yi Gang, head of the State Administration of Foreign Exchange, said recently that China will adjust the structure of its foreign exchange reserves according to the country's situation, but the adjustment did not mean a large fluctuation and it will be a steady process.

Statistics from China's central bank showed that by the end of September, the country's foreign exchange reserves reached $2.27 trillion, up 19.26 percent year-on-year.

Figures from the US Treasury Department also revealed that the country's second-largest debt holder, Japan, and the third-largest, the UK, increased US holdings by $20.3 billion and $22.4 billion respectively, compared with the previous month to totals of $751.5 billion and $249.3 billion respectively.
 

Agencies and Li Na contributed to this story