(Yicai Global) March 16 -- China's holdings of US Treasury bonds fell by USD17 billion to USD1.17 trillion, the third cut in six months, to hit a new low since July last year, but the country remained the largest foreign holder of US treasuries nonetheless, data the US Treasury Department issued today show.

China may reduce its US debt purchases as trade tensions increase, Bloomberg reported in early January. The country's foreign exchange reserves have always been managed based on the principles of diversification and decentralization to ensure their overall safety and increase the value of forex assets, China's top foreign exchange regulatorstated in response to the report.

The White House has also demanded a reduction in China's trade surplus by USD100 billion on March 14. The US trade deficit with China reached a record USD375 billion last year, or nearly 70 percent of its global trade imbalance of CNY566 billion, per its own statistics.

Both the US dollar and debt are falling. The deeper reason is investors dislike the Trump government's trade and climate policies. The current administration urges the return of the traditional manufacturing industry in trade policies that fly in the face of the modern trend, which is a typical policy misjudgment, said Liu Junhong, a research fellow at the China Institute of Contemporary International Relations.