(CNSNews.com) - China has dropped 97 percent of its holdings in U.S. Treasury bills, decreasing its ownership of the short-term U.S. government securities from a peak of $210.4 billion in May 2009 to $5.69 billion in March 2011, the most recent month reported by the U.S. Treasury. http://cnsnews.com/news/article/china-has-divested-97-percent-its-holdin
It coincides with the hard realities of the oil bull - China is a heavy, heavy subsidizer of internal oil consumption - the more oil goes up, the more foreign reserves China needs to burn just to stand still. Bernanke knows this. Beijing knows that Bernanke knows this. Interesting times.
US has been doing this for quite some time http://en.wikipedia.org/wiki/Global_strategic_petroleum_reserves
So what? Doesn't the article also mention that China replaced these bills with longer-dated treasuries and agencies? That's just liquidity management on their part...
Out of control media sources are one of the biggest danger to society. Especially when they report parts of a story, like in this case. I believe the Chinese increased their bond portofolio duration to gain higher interest. As a matter of fact they purchased the whole 250 Billion portfolio of longer maturity Treasuries PIMCO sold a few months ago.