![An employee counts renminbi and US dollar notes at an Industrial and Commercial Bank of China's branch in Huaibei, Anhui province. China has vowed to diversify its $2.85 trillion foreign-exchange reserves portfolio to counter risks. [China Daily]](http://images.china.cn/attachement/jpg/site1007/20110217/001fd04cea510ec6f42525.jpg "An employee counts renminbi and US dollar notes at an Industrial and Commercial Bank of China's branch in Huaibei, Anhui province. China has vowed to diversify its $2.85 trillion foreign-exchange reserves portfolio to counter risks. [China Daily]")
An employee counts renminbi and US dollar notes at an Industrial and Commercial Bank of China's branch in Huaibei, Anhui province. China has vowed to diversify its $2.85 trillion foreign-exchange reserves portfolio to counter risks. [China Daily]
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An employee counts renminbi and US dollar notes at an Industrial and Commercial Bank of China's branch in Huaibei, Anhui province. China has vowed to diversify its $2.85 trillion foreign-exchange reserves portfolio to counter risks. [China Daily] |
China reduced its holdings of US treasury bonds in December for the second straight month, but analysts said it is market-based short-term move and would not substantially change the country's foreign exchange reserves basket.
The biggest buyer of US treasury debt cut its holdings by 0.4 percent to $892 billion, the US Treasury Department said on Tuesday, after unloading $11.2 billion to $895.6 billion in November.
Before that, China had increased its portfolio for four straight months.
"Since the financial crisis, China has been trying to adjust the investment structure of its foreign reserves to control risks. As the dollar rebounded in the last two months, it might be a market strategy to sell the debt for the time being," said Wang Jun, economist at China Center for International Economic Exchanges.
Although China is still the largest foreign holder of the US debt, the difference in its holdings in relation to Japan's, the second-largest, has shrunk from $123.8 billion at the beginning of 2010 to about $8 billion by the year's end.
China has vowed to diversify its $2.85 trillion foreign-exchange reserves portfolio to counter risks and keep the value of the assets.