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Tuesday, June 15, 2010

China Holds ~13% of all U.S Debt Held by the Public

It looks like the media may have finally gotten the China / Treasury purchase story right. The AFP details:

China's holdings of US debt climbed to the highest level this year, the US Treasury said Tuesday even as Beijing stepped up attacks on the United States for its burgeoning debt.

The cash-rich Chinese government raised its US Treasury bond holdings to 900.2 billion dollars in April, its highest level since November 2009, while posting the second consecutive monthly rise, according to a report on international capital flows.

China remained far ahead as the top foreign debt holder, followed by Japan, which held 795.5 billion dollars in April, and third-placed Britain at 239.3 billion dollars, according to the figures.

The monthly gain in April and the previous month came after six straight months in which China appeared to reduce its Treasury holdings, or keep them flat.

While that triggered concerns Beijing was diversifying away from US bonds, some analysts said Beijing was secretly buying bonds via third countries to mask its importance as a creditor -- a role which had attracted considerable scrutiny.
EconomPic reported all along (see February's China Sells Treasuries... or Did They?), China has continuously been buying up Treasuries... as much as $400 billion in net purchases since December 2008 bringing total Treasury holdings between China and the U.K. (a top region used to make their purchases) to almost 10% of all outstanding debt and almost 15% of all outstanding U.S. debt held by the public. Putting the UK's own holdings at ~$100 billion, we have China holding around 13% of the $8.4 trillion in debt held by the public.



For full details as to why China and the United Kingdom have been combined in the chart above, go here.

Source: US Treasury