China's holding of US debt rose $3 billion to $847 billion in July: report
18 Sep 2010
China bought $3 billion worth of US government bonds in July this year even as it increased scope of imports of American goods, in order to halt the appreciation of the yuan against the US dollar.
China's holdings of US treasury bonds, which has steadily been falling from a high of $900 billion in April, has risen by $3 billion to around $847 billion, the state-run China Daily has reported.
This is in tune with a key demand of Washington. The Obama administration is concerned over China, its largest creditor, moving away from investing in dollar assets, the report said.
The US Department of Treasury also reported a $3 billion increase in China's holding of US government debt. The report coincided two US congressional hearings on China's exchange rate policy.
US Treasury Secretary Timothy Geithner, who attended the hearing, called for "a significant and sustained appreciation of the yuan over time" and "a more balanced economic relationship".
Chinese economists believe that the country's holdings of US treasury debt is unlikely to fade in the near future as two of the world's largest economies become increasingly interdependent.
China's investment in US treasuries "helps bolster the US financial market. The yuan has become more flexible and risen by about 1.6 per cent since mid-June despite hurting Chinese exporters and domestic jobs," the Daily said in its editorial.