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People's Daily Online>>China Business

China cut US debt holdings by 1.5 billion USD

(People's Daily)

17:12, January 19, 2012

Edited and translated by Yao Chun, People's Daily Online

China trimmed its holdings of U.S. government bonds by 1.5 billion U.S. dollars for a second straight month in November of 2011, but it was still the largest creditor to the United States, according to the data issued by U.S. Department of the Treasury on Jan. 19.

As of the end of November, China’s ownership was 1.1 trillion U.S. dollars. It has been keeping the scale above the amount of 1 trillion U.S. dollars for 18 months since June 2010.

In an effort of diversifying forex investment, China continued the reduction in November, said Zhao Xijun, Vice Dean of Finance Faculty at People’s University of China.

Besides, other factors including the external environment changes and policy adjustments also affected Beijing’s decision in buying the bonds. For example, the shrinking Chinese trade surplus in the second half year of 2011 contributed to the decline of China’s forex growth rate, said Zhao.

Now that the trimming only accounts for as small as 0.1 percent in the overall holdings, November’s reduction will not change the general structure of China’s foreign exchange reserve, said Zhao.

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