China's long-term holdings of US debt grow

China’s holdings of longer-dated US Treasurys increased in September by the largest amount since March 2010, as ongoing turmoil in the eurozone pushed investors to seek safer US sovereign debt, Bloomberg reported. China purchased a further US$20.7 billion of US government notes and bonds in September, increasing its total long-term US debt to US$1.14 trillion. The country’s overall short-term and long-term Treasury holdings climbed 1% to US$1.15 trillion, the largest monthly increase in almost a year. Many analysts speculated that the increase, a sharp reversal of China’s reduced exposure to US debt in August, was sparked by a broader “risk-off” attitude among investors after continued deterioration in eurozone sovereign bond markets. “People were pretty scared. During the flight to quality, I’m sure that China was involved,” said George Goncalves, head of interest rate strategy at Nomura in New York.