According to an article published today in the Wall Street Journal,
"China, the biggest foreign buyer of U.S. debt, in July bought a record amount of U.S. government agency debt and mortgage-backed securities, even as it sold Treasurys, according to data from the Treasury Department.
China's purchases are the latest sign the country hasn't stepped away from funding the U.S. even as prices on Treasurys and mortgage debt fell sharply this summer, sending yields higher and diluting the value of investors' fixed-income holdings, said analysts. China was a net buyer of Treasury notes and bonds in May and June when many other investors cut back their holdings amid signs that the Federal Reserve was weighing reducing its bond purchases.
In July, China increased its holdings of high-grade securities sold by government-sponsored enterprises such as Fannie Mae and Freddie Mac and securities backed by home mortgages guaranteed by the U.S. agencies, by $20.2 billion, according to the Treasury Department data on capital flows. and its China's overall holdings of Treasury debt actually rose by about $1.5 billion to near a record high of $1.277 trillion thanks to its purchases of shorter-term U.S. Treasury debt called bills, which mature in a year or less.Japan, the second-largest foreign owner of Treasury debt after China, boosted its overall holdings by a record $52 billion in July to $1.135 trillion".
