China may be buying US$50 billion in Special Drawing Rights-denominated IMF bonds (using renminbi, no less), but that doesn’t mean it has kicked its T-bond habit. The US has of course been in full salesman mode ("Yah, but that TruCoat…") with Treasury debt to try to cover a startlingly large budget deficit, but most countries aren’t listening. China is one of just three countries to increase its holdings, to US$800.5 billion in July – a shot of much-needed good news for Secretary Geithner. Of course, buying more US Treasury debt doesn’t mean that China has abandoned diversification. Investments in foreign commodity and energy assets – while tiny in comparison – are still a favorite. If Venezuelan President Hugo Chavez is to be believed, China has agreed to sign a deal worth US$16 billion with state oil firm Petroleos de Venezuela to develop the country’s Orinoco oil fields. No details yet, however, on which Chinese companies are involved. On the commodities side, BHP Billiton is making reassuring noises about the staggering 30-fold increase in China’s coking coal imports this year. Don’t worry, the mining giant says: The higher demand is sustainable. Increasing Chinese steel production and more advanced steel mills will require China to rely more on imported coking coal, generally of higher quality than its domestically mined equivalent.