(Yicai) Sept. 19 -- China, the US’ third-largest creditor, reduced its holdings of US Treasury bonds in July to the lowest level since 2009, according to the latest data.

China pared its ownership of US Treasuries by USD25.7 billion in July from the previous month to USD730.7 billion, according to data released yesterday by the US Department of Treasury. This marks the fourth reduction this year.

China's holdings of US Treasuries have remained below USD1 trillion since April 2022 and have generally exhibited a downward trend. In March, China trimmed its stash by USD18.9 billion, ceding its position as the second-largest US creditor to the United Kingdom and sliding into third place.

Japan maintained its ranking as the US’ biggest creditor in July, adding USD3.8 billion to bring the total to USD1.15 trillion. Meanwhile, the UK, which is still the second-largest creditor, also hiked its ownership of US debt by USD41.3 billion to USD899.3 billion.

There was a net inflow of USD2.1 billion into long- and short-term US securities from foreign investors in July, according to the US Treasury Department’s report. This reflects USD22.6 billion in private inflows, offset by USD20.5 billion in outflows from official institutions.

Despite cutting US debt, China's foreign exchange reserves have been rising. The reserves swelled USD29.9 billion at the end of August from the month before to USD3.32 trillion, the highest level since January 2016, according to data from the State Administration of Foreign Exchange.

Editor: Kim Taylor