China, the largest foreign creditor to the U.S., bought more Treasuries in October than any other foreign investor, a sign that the U.S. is still considered a global safe haven despite the 16-day partial government shutdown and threat to default that month.
China boosted its holdings by $10.7 billion, or 0.8 percent, to $1.305 trillion, according to Treasury Department data released Monday. China overtook Japan as the largest creditor to the U.S. in September 2008, with holdings hitting a record high of $1.314 trillion in July 2011. So far this year, Beijing has increased its holdings 6.9 percent and is on track for the biggest gain since its stake in Treasuries rose 30 percent in 2010.
Japan boosted its position in Treasuries by 5.7 percent through October and is on track for its sixth annual rise in holdings of the debt.
Amid the debt ceiling crisis in October, China’s Vice Finance Minister Zhu Guangyao urged Washington to take decisive steps to avoid a debt crisis and ensure the safety of Chinese investments. Japan’s finance minister, Taro Aso, made similar public comments, as have Singapore’s prime minister, the chairman of Switzerland’s central bank and many other officials.
It now appears that a U.S. default was not as big a concern for U.S. creditors as markets originally feared. Foreign investors overall added $24.4 billion in U.S government-debt holdings.
Below are the top 10 largest holders of U.S. debt at the end of October.
1. China, mainland: $1.305 trillion
2. Japan: $1.174 trillion
3. Caribbean Banking Centers: $290.7 billion
4. Oil Exporters*: $236.6 billion
5. Taiwan: $184.5 billion
6. Belgium: $180.3 billion
7. Switzerland: 174.3 billion
8. UK**: $158.4 billion
9. Russia: $149.9 billion
10. Hong Kong: $136.3 billion
* Oil exporters include Ecuador, Venezuela, Indonesia, Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, the United Arab Emirates, Algeria, Gabon, Libya and Nigeria.
** UK includes Channel Islands and Isle of Man.