China remains top holder in U.S. debt

08:56, March 01, 2010      

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China remained the top holder in the ballooning US debt last year, revised U.S. Treasury data say, after earlier indications it had been eclipsed by Japan.

Revised data released Friday by the U.S. Treasury Department indicated that while China had cut back on its bond holdings, the level was still well above that of Japan.

China held 894.8 billion dollars in Treasury securities at the end of December, more than the 755 billion dollars estimated earlier in the month. But it was down from a revised 929.0 billion dollars in November.
Japan in December held 765.7 billion dollars in U.S. Treasury debt.

The sharp revision came as the Treasury Department looked at Chinese holdings in US Treasuries in third markets such as Britain and Hong Kong, which were not picked up by the earlier estimates.

Earlier, there are wild speculations that China has run weary of U.S.
policies, especially after U.S. President Barack Obama defied Beijing by approving a US$ 6.4 billion arms package to Taiwan and meeting the Dalai Lama, a widely-deemed separatist figure in China. The speculations said that Beijing would dump more U.S. debt holdings to show its disapproval of U.S. policies towards China.

However, a serious move away from U.S. Treasuries would trigger a fall in the bond prices, ultimately hurting Beijing, many experts say.

Talking to Chinese online readers in Beijing on Saturday, Chinese Premier Wen Jiabao said he hoped 2010 would be a peaceful year for trade and economic relations between the United States and China.

People's Daily Online
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