China boosts holdings of US Treasury securities

By the Associated Press | July 18, 2011 | 9:29 AM EDT

WASHINGTON (AP) — China, the biggest buyer of U.S. Treasury debt, has increased its holdings in May for the second straight month, after five months of declines.

The Treasury Department says that China increased its holdings by $7.3 billion to $1.16 trillion.

Total foreign holdings of Treasury securities rose 0.6 percent to $4.51 trillion.

The report shows that foreign investors didn't lose their appetite for U.S. government debt in May, even though the U.S. reached its borrowing limit that month. The Treasury Department says that unless the limit is raised by Aug. 2, the U.S. will default on its debts.

Japan and the United Kingdom, the second and third largest holders of U.S. debt, also both increased their ownership of Treasuries in May.