China was a net seller of US Treasurys for the second month running in December, although it remains the largest foreign holder of US debt, Dow Jones reported. Beijing sold US$4 billion of its holdings, following on from a net sale of US$11.2 billion in November. The country’s overall holdings now stand at US$891.6 billion, just a fraction more than Japan’s holdings of US$883.6 billion. Kathy Lien, director of currency research at GFT Forex in New York, noted that China’s commitment to the euro had increased during the sovereign debt crisis, and this could potentially be at the expense of its dollar holdings. Over the longer term, however, "China has deep pockets and a lot of money to spend so they could be buying both euros and U.S. dollars," Lien said.
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