According to a report issued by the United States Treasury, China's holdings of US government bonds jumped by US$22.3 billion in the month of August, the China Securities Journal reported.
At the end of August, China's holdings of US government bonds reached US$541 billion, the second largest holding after Japan whose stake dropped to US$585.9 billion in August, from US$593.4 billion in July. Britain was the third largest holder with US$307.4 billion.
Between them the three countries have 80.7 percent of overseas holdings of US government bonds.
Ha Jiming, chief economist at China International Capital Corporation Limited (CICC), said that China should buy US government bonds before other countries do, in order to benefit from a rise in the price of securities and an appreciation of the US dollar.
Whether US dollar will maintain its strength is unclear. However, as China's holding of US government bonds increases and foreign exchange reserves accumulate, it becomes more important to adjust the capital structure of the holdings and improve US dollar assets management, said Jin Yanshi, chief economist at Sinolink Securities Co., Ltd.
For more details, please read the complete story in Chinese:
(http://paper.cs.com.cn/html/2008-10/20/content_18310188.htm)
(China.org.cn by Fan Junmei, October 20, 2008)
