China cuts holdings of U.S. treasury debt in June

Aug. 18, 2009 (China Knowledge) - China reduced its holdings of U.S. treasury debt 3.1% to US$776.4 billion in June from US$801.5 billion in May, according to a report released by the U.S. Treasury Department on Monday.

The June reduction in China's holdings of U.S. treasury debt was the largest percentage cut since the 4.2% reduction in October 2000.

However, the amount of debt China still holds is still larger than the US$763.5 billion it held in April and the US$767.9 billion it held in March.

China, the biggest holder of U.S. treasury debt, sold US$51.75 billion worth of short-term U.S. treasury bonds in June, but bought US$26.65 billion in other U.S. debt.

In the same month, Japan, the second-biggest holder of U.S. treasury bonds, increased its holdings from US$677.2 billion in May to US$711.8 billion. The overall net purchase of U.S. debt amounted to US$100.53 billion in June, up from US$22.55 billion in sales in the previous month.