China’s State Administration of Foreign Exchange (SAFE) is still buying record amounts of US government bonds despite Beijing’s publicly expressed fears of a collapse in the US currency, the Financial Times reported. The country’s direct holdings of US Treasuries rose by US$23.7 billion in March to reach a new record of US$768 billion, according to preliminary US data. No official information is released on the composition of China’s foreign exchange reserves, but dollar assets are estimated to account for up to 70% of the total US$1.95 trillion. While the collapse of US mortgage financiers Fannie Mae and Freddie Mac last summer caused SAFE to shift its purchases towards more short-term US government debt in the expectation of interest rate hikes, the agency’s general strategy has changed little. Chinese and Western officials said Beijing had little choice but to keep buying US Treasuries as it is the only market large enough and liquid enough to support the huge purchases.