China's holdings of US securities take a slight dip

Updated: 2014-08-16 01:52

By JACK FREIFELDER in New York(China Daily USA)

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China cut its holdings of United States government debt in June for the fourth time in the last six months, which may reflect a continuing move away from US assets.

China, the largest foreign holder of US Treasuries, held $1.268 trillion in US debt as of June, down $2.5 billion from the previous month and below the $1.27 trillion mark for the second time since August 2013, the US Treasury Department said Friday in a monthly report. China's holdings hit a high of $1.317 trillion last November.

Japan remained the second-largest US creditor in June, though its debt securities decreased $600 million to $1.219 trillion.

Foreign demand for US assets weakened as net foreign sales of long-term securities totaled $18.7 billion in June, compared to purchases of $19.4 billion in May, the data showed.

The total of all foreign acquisitions of long-term securities, short-term securities and banking flows in June resulted in a net outflow of $153.5 billion, the Treasury said.

The Treasury's monthly release of its Treasury International Capital (TIC) data details foreign ownership of US securities. For transactions and banking data, there is a 1.5-month lag between the release and the as-of date.

After three straight months of US debt sell-offs between February and April, a brief uptick in China's holdings of US securities in May was promptly followed by another dip in June.

The last decline of China's Treasury holdings that exceeded three months came in the final five months of 2011, according to a June report by Bloomberg News.