China reduced holdings of US Treasury debt in December by the most in two years

US Treasury Department data released yesterday showed China reduced holdings of US Treasury debt in December by the most in two years

• China is the largest foreign US creditor
• Reduced its position in US government bonds by $US47.8 billion, or 3.6% to $US1.27 trillion
• Largest decline since December 2011

Other data showed:

• International investors increased holdings by 1.4% in December, pushing foreign holdings to a record $US5.79 trillion

Despite the monthly sell-off, Chinese holdings of US government debt rose 4% in 2013