The fact that China's holdings of US debt are lower and more stable is a sign that the economic relationship between China and the US is getting more "normal". In the past, it would always draw a lot of economic and political attention in the US when China increased or reduced its holdings of US debt. Especially when the relationship between China and US was in tension, any reduction in the holding of US debt would be read as Chinese interference in US politics.

However the issue of who will be the biggest US creditor between China and Japan is a matter of little relevance. Foreign investors have never been the biggest drivers of US bond market - domestic private investors, enterprises, and state governments already hold more than 70 percent of its net national debt. China and Japan represent only 40 percent of the total overseas holdings. No matter how things go in the short term, China and Japan will remain the top 2 creditors for the foreseeable future.