China increased its holdings of US Treasuries by 0.4% in May, the largest expansion in six months, Bloomberg reported. The increase lifted China’s total accumulation of US debt to US$1.1696 trillion, according to Treasury Department data released Monday; holdings have risen 1.5% for the year. China, the largest foreign creditor to the US, has more than doubled its holdings of US Treasuries since 2007, leading to calls from Chinese policymakers for greater diversification. But despite historically low interest rates and slow growth, the US continues to attract investment from China and other countries in Asia, including Japan. US Treasuries remain a safe haven for investors – both private and official – amid increasing uncertainty in Europe, said Shyam Rajan, a strategist at Bank of America-Merrill Lynch.
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