China increases US Treasury holdings

China, the largest foreign holder of US Treasuries, continued to increase its purchases in June as its holdings rose by USD 5.7 billion to USD 1.17 trillion, the state-run China Daily reported Wednesday. June was the third consecutive month that China increased its holdings in US Treasury bonds, despite concerns over the safety of dollar assets, the Beijing-based newspaper said. The new purchase boosted China's holdings at a time when global investors were worried about the outcome of the US debt ceiling debate. China added to its holdings by USD 7.6 billion in April and USD 7.3 billion in May, according to data from the US Department of the Treasury. As the largest creditor of the US, China has been closely watched for its investments in dollar assets, especially after Standard and Poor's downgraded the credit rating of the US, the report said. Japan, the second-largest holder of US Treasuries, reduced its holdings by USD 1.4 billion in June, leaving them at USD 911 billion. Britain boosted its holdings from May's USD 346.8 billion to USD 349.5 billion in June. The US Republicans and Democrats in Congress agreed on August 2 on a deal to raise the debt ceiling and cut the deficit, but the divisive political debate helped prompt a downgrade of the US credit rating from Standard and Poor's. US Vice-President Joe Biden is set to arrive in Beijing late on Wednesday to begin his China tour, during which he is expected to offer assurances about the struggling US economy, the report said. Biden is the first high-ranking US official to visit China since the US domestic debt crisis, which drew criticism from Beijing.