China continues to remain the biggest creditor of the US as it modestly increased its holding of US Treasury securities by $200 million to $1.17 trillion in November last year, says a report.

According to the US Treasury Department’s monthly Treasury International Capital report, November experienced a rebound in foreign demand in US bonds, despite concerns over unresolved fiscal policy debates in Washington, state-run China Daily reported.

According to the data released by China’s Central Bank this month, the foreign exchange reserves rose to $3.31 trillion at the end of last year from $3.29 trillion from September last.

However, China’s holdings of US Treasury shrank lower from the $1.25 trillion high reached in November 2011, the Daily report said.

Yao Wei, a Hong Kong-based economist with French bank Societe Generale SA, said the modest increase in November is a further sign of Chinese diversification in foreign investments.

“China certainly is trying and will continue to try to diversify away from US Treasuries,” Yao told the Daily.

Lu Jiwei, chairman and CEO of China Investment Corp, (CIC) the country’s sovereign wealth fund, said that while China will continue to buy US government debt, the return on its investment doesn’t look promising.

Japan, which is second to China in the amount of US debt held, increased its total by $900 million, to $1.133 trillion, in November.

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