China boosted its holdings of US Treasury bonds to their highest level in nine months in July, Bloomberg reported. The world’s second-largest economy increased its US debt holdings to US$1.17 trillion in reaction to a surging trade surplus. Even as President Obama grappled with US lawmakers over the debt ceiling, prompting concern that the US might default on its debt, Beijing was increasing its exposure to US Treasuries. Chinese exports rose 20.4% in July year-on-year, creating a surplus of US$31.5 billion, the highest level since January 2009. China’s increase was against the overall trend: Foreign investors reduced their net exposure to Treasuries in June for the first time since April 2009. “If [China] stopped buying, they wouldn’t have much else to do with the cash, so they buy,” said David Ader, head of government bond strategy at CRT Capital Group LLC.