China's US Treasuries reach US$1.317tr
Capital inflows and intervention to limit yuan gains contribute to forex buildup
The mainland's holdings of US treasuries increased US$12.2 billion to a record US$1.317 trillion in November, data released on the US Treasury Department's website shows.
Japan's holdings rose US$12 billion to US$1.186 trillion, according to the figures.
The mainland's swelling foreign-exchange reserves, reported by Beijing this week to have reached a world record US$3.82 trillion at the end of last month, may sustain the nation's appetite for US debt.
Capital inflows and intervention to limit gains in the yuan have contributed to the central government building up currency holdings that are a third of the global total.
"Large interest-rate differential and steady appreciation of the renminbi contributed to large arbitrage inflows into China, a situation made all the more easy with China's increasing financial integration and renminbi internationalisation," UBS economist Wang Tao wrote in a report on the mainland data.
She said the mainland would accumulate foreign-exchange reserves more slowly this year because of the US Federal Reserve's monetary tapering, a likely widening of the yuan's trading band and tighter controls on arbitrage activities.