The latest data from the US Treasury Department indicates that China increased its holdings of US sovereign debt for the seventh consecutive month in September.
According to data released by the US Treasury on 17 October China increased its holdings of US Treasuries by USD$34.5 billion September.
The increase brought China’s total holdings of US Treasuries to $1.2005 trillion, further cementing its position as the USA’s biggest foreign creditor.
China has increased its holdings of US Treasuries for seven consecutive months, raising total holdings by $149.4 billion since the month of February.
In June China overtook Japan to re-assume its position as America’s biggest nation creditor.
With respect to the increase in US Treasury holdings, Chinese officials said that the US bond market is a key market for China, and that increases and reductions in Treasury holdings are part of regular investment operations.
According to officials China will continue to perform dynamic optimisation and adjustment of its debt holdings based on various changes in the market.
Zhang Yongjun (张永军), a researcher with the China Center for International Economic Exchanges, has previously said to The People’s Daily that US Treasuries will remain the investment of choice for Chinese foreign reserves given their stability, safety and liquidity.
“When investing in securities it’s necessary to select markets with stable returns and comparatively strong liquidity,” said Zhang. “US debt enjoys a solid performance in this regard, while there is a market of sufficient scale and relatively high safety.”