China slashes US debt holdings in December

China cut its holdings of US Treasury debt in December by US$47.8 billion, or 3.6%, to US$1.27 trillion, the largest decline since December 2011, Bloomberg reported, citing official data. At the same time, international investors increased holdings by 1.4% in December, pushing foreign holdings to a record US$5.79 trillion. “The Chinese move to sell suggests central banks are becoming more wary of taking duration risk now with the Federal Reserve firmly into the tapering process,” said Aaron Kohli, an interest-rate strategist in New York at BNP Paribas.