China holds far more US debt than previously estimated

The United States of America is far more indebted to China than originally thought, after a major upward revision by the US Treasury Department. In a politically sensitive revelation, the revised figures indicate that China is holding upwards of $1 trillion of US debt.

China adopts devious routes to purchase US debt in a bid to disguise the extent of its holdings as the matter is politically sensitive in Washington.

In January, the Treasury reported that at the end of 2010 the Asian nation, the biggest buyer of US debt, held $891.6 billion. But now, it says China held $1.160 trillion in Treasury securities such as agency debt, bonds and notes.

Including equity and asset-backed securities, China held $1.611 trillion in US securities assets, up from $1.464 trillion in June 2009.

The Treasury revised China's holdings in the month of June 2010 upwards by 32%, around $268 billion, from the previous estimate to $1.112 trillion. It then used the revised assessment to form a new baseline for the following months, resulting in an upward estimate of December holdings by China.

The US publicly traded debt totalled $8.97 trillion in January, according to the Treasury.