China remains the largest foreign holder of US Treasury securities as at the end of December, the US media reported on Saturday.

The report quoted the new government data as saying that China held US$894.8 billion in Treasury securities at the end of December, more than US$755 billion that had been previously estimated.

But the new report also showed China trimmed its holdings of US debt by US$34.2 billion in December.

The US Treasury reported on February 16 that Japan surpassed China as the largest holder of US Treasury securities in December. But the new estimate said Japan, now back in second place, held US$765.7 billion in December.

Japan had been the largest holder of US Treasury securities until China gained that distinction in 2008.

"Purchase of Treasuries by China would reflect only purchases by an entity in China from an entity based in the US," Stone & McCarthy Research Associates said in a recent client note.

"The Data would not pick up purchases done on behalf of Chinese investors by dealers in the U.K or Hong Kong, for example, nor would it pick up purchases of Treasuries by investors in China from investors based outside of the US," it added.

China defended its move to reduce its holdings of US Treasury securities, saying the United States should take steps to promote confidence in US dollar .

Last week, when responding to questions on China's sale of US Treasury securities in December, China's Foreign Ministry spokesman Qin Gang said the issue should be viewed from two perspectives.

He said on the one hand, China always followed the principle of "ensuring safety, liquidity and good value" in managing its foreign exchange reserve. And when it came to how much and when China buys the bonds, the decision should be made taking into account the market and China's need, so as to realize rational deployment of China's foreign exchange property, he said.

And on the other hand, the United States should take concrete steps to beef up the international market's confidence in the US dollar, Qin said.

The way to view the issue was similar to doing business, he said.

(Xinhua News Agency March 1, 2010)