China’s holdings of U.S. Treasury bonds hit a record high

China’s holdings of U.S. Treasury bonds hit a record high The latest statistics released by the U.S. Department of the Treasury on the 16th showed that China increased its holdings of U.S. Treasury bonds by $25.2 billion in May, making...

Data show that in May 2013, China's holdings of U.S. debt reached a record high of $1.3159 trillion for the first time, making it still the largest creditor of the United States. This data increased by $25.2 billion from the revised $1.2907 trillion in April. The pre-revision figure for April was $1.2649 trillion.

From May 2012 to May 2013, China's holdings of U.S. Treasury bonds generally showed an "increase and decrease" trend. Among them, China reduced its holdings only four times, and the rest were all increases. Especially since February this year, it has increased its holdings of U.S. Treasury bonds for four consecutive months.

From the data, compared with May 2012, China's holdings of U.S. Treasury bonds increased by US$151.9 billion year-on-year. According to revised data released by the U.S. Treasury Department last month, compared with 2011, China increased its holdings of U.S. debt by $68.5 billion in 2012.

While China continues to increase its holdings of U.S. debt, Japan, the second largest creditor of the United States, has reduced its holdings of U.S. debt for two consecutive months. In May, Japan's holdings of U.S. debt fell from $1.1127 trillion in April to $1.1110 trillion, a gap of $204.9 billion from China. Japan also reduced its holdings of U.S. debt by $1.6 billion in April. However, the country’s total U.S. debt holdings have remained above the 1.1 trillion mark for 13 consecutive months.

Regarding the issue of increasing holdings of U.S. Treasury bonds, some Chinese experts believe that, taking into account the current overall state of the world economy and the unrivaled national strength of the United States, U.S. Treasury bonds are still the dominant investment product in the international bond market. From a safety perspective alone, investing in U.S. bonds is still better than bonds from other countries. In addition, the increasing recovery of the U.S. economy has also provided support for the strength of the U.S. dollar.