MercoPress. South Atlantic News Agency

US says China remains largest holder of Treasury securities

Japan with 765,7 billion USD Treasury securities remains in second place

Japan did not surpass China to become the world’s largest foreign holder of US Treasury securities in December, reported the US Treasury Department on Friday following a revision to figures released earlier this month.

According to Friday’s statement, China held 894.8 billion US dollars in Treasury securities at the end of December, more than the 755 billion USD that had been previously estimated. Japan in December had 765.7 billion in Treasury securities, less than the 769 billion Treasury had estimated.

The large revisions stem in part from limits on data collected by the US Treasury. The Treasury International Capital system, TIC, report tracks transactions based on the countries in which counterparties are located. “Purchases of Treasuries by China would reflect only purchases by an entity in China from an entity based in the US” Stone & McCarthy Research Associates said in a recent client note.

“The data would not pick up purchases done on behalf of Chinese investors by dealers in the UK or Hong Kong, for example, nor would it pick up purchases of Treasuries by investors in China from investors based outside of the US”.

The Treasury revises TIC reports annually to adjust for data limitations. The revisions reflect foreign holdings at the end of June. Preliminary estimates of those annual revisions are typically released in February.

The latest TIC indicates China retained its status as the world’s main foreign holder of US Treasury securities in December. Japan had been the largest holder of US Treasury securities until China gained that distinction in 2008. Nevertheless the figures show that the value of Chinese holdings of Treasury securities has fallen since June.

In June, China held an estimated 915.8 billion in Treasury securities. That figure climbed to 938.3 billion in September to October but fell in November and December.