China slows U.S. Treasuries purchases

BEIJING, March 18 (UPI) -- China increased its holdings of U.S. Treasury bonds at the slowest rate since last June, indicating a diminishing appetite for the securities, figures show.

Rising concerns over the security of the bonds, coupled with China's falling foreign trade surpluses, prompted Beijing to slow its increase in U.S. Treasury purchases from $14.3 billion in December to $12.2 billion in January, China Daily reported Wednesday.

Beijing owns $739.6 billion in U.S. Treasuries, the latest International Capital Report by the U.S. Treasury Department indicates.

"Purchases of U.S. Treasuries are set to decline, given the fall in the trade surplus," Erh-Cheng Hwa, chief economist of Bank of Communications, told China Daily.

Beijing's trade surplus dropped to $4.8 billion in February, down 87.6 percent from a year earlier, with some analysts saying it may decline even further as a stimulus package instituted by the government is seen as doing little to boost exports, the newspaper said.