20 Oct 2011

US debt holdings lowred by China

8:16 am on 20 October 2011

China has reduced its holdings of US debt to their lowest level in a year.

China sold $US36.5 billion in US Treasuries or bonds to cut its holding to $US1137 billion in August, according to data from the US Treasury department.

In August, Standard & Poor's cut the credit rating for the United States to AA+ from AAA over concerns about budget deficits.

China is the largest foreign buyer of US government debt. Hong Kong, Taiwan and Singapore also reduced their holdings of US Treasuries in August.

However, the BBC reports overall demand for US Treasuries increased in August amid rising global economic uncertainty.

Britain and Switzerland increased their holdings by almost $US40 billion each, and Japan increased its investment by $US21.8 billion to $936.8 billion.