Quick Take: China’s T-Bond Holdings Hits Five-Month Low

(Beijing) — China’s holdings of U.S. Treasurys dropped to a five-month low in November, as attention shifted to the data point after a foreign news outlet reported that Beijing might slow its purchase of U.S. government debt.

China held $1.18 trillion in U.S. Treasury bonds by the end of November, a decrease of $13 billion from October, data published by U.S. Treasury Department showed Wednesday. The country’s U.S. Treasury holdings reached a peak for this year in August, when China held $1.2 trillion of U.S. government debt.

Despite the selling, China remains the top holder of U.S. government bonds, with its November holdings up 12% from a year earlier.

Earlier this month, China’s foreign exchange regulator dismissed a report by Bloomberg News that said Beijing might slow its buying of U.S. debt. That report cited unnamed sources suggesting the State Administration of Foreign Exchange (SAFE) had recommended slowing or halting purchases of the U.S. government bonds for reasons that included looking for investment alternatives and the current trade tensions with the U.S.

SAFE said in a statement that China’s investment in U.S. Treasury bonds is market-driven.

Contact reporter Pan Che (chepan@caixin.com)