China retains top slot as biggest holder of US debt
27 Feb 2010
Washington: The US government has now clarified that China still retains its place as the largest foreign holder of US Treasury debt and did not cede it to Japan in December, as reported earlier. The report has sparked off a certain amount of speculation whether China had begun a slow process of diversifying its holdings of American securities on concerns about ballooning American deficit.
Early this month, US president Barack Obama presented his budget for the year projecting a record deficit of $1.56 trillion. This surpasses last year's record of $1.4 trillion.
The US Treasury Department said that under annual benchmark revisions released Friday, China's holdings of US Treasury securities stood at $894.8 billion at the end of December, which maintains its position in the first place ahead of Japan, which now moves back to second place, with $768.8 billion.
Earlier Treasury data, released on 16 February, had showed China had been surpassed by Japan, but the new report now says that it did not account for purchases made by Chinese investors in other places, such as Britain.
Taking those into account, the Treasury Department now says that China's holdings in December have swelled by $139.4 billion above that reported on 16 February.
The earlier report had suggested that China reduced its holdings in December by $34.2 billion, as compared to November.
