China has sold US Treasury securities for the second consecutive month in December 2010, latest data shows.
The communist country offloaded securities worth $4 billion (£2.5 billion), bringing down its US Treasury security holding to $891.6 billion in December, according to numbers released by the US Treasury department. China has sold securities worth $11.2 billion in November 2010.
China’s latest move comes as analysts are trying to forecast the growth and interest rates in the US and how robust the economic recovery is and the soundness of the economy.
China remains biggest holder of US debts despite the recent liquidation.
The monthly Treasury data indicates borrowing cost for the US government and how easily it is able to raise funds. China’s move may adversely affect the US government’s recent effort to expand money supply in the economy by way of Quantitative Easing II.