For the past decade China has been gobbling up US treasury bonds, acting as the major financier of America’s deficits, tax cuts, wars, government spending, you name it. For what it’s worth, this stopped in 2011: China actually owned fewer treasury bonds at the end of 2011 than they did when the year began.
The following numbers represent the percent increase in China’s treasury purchases from the beginning of the year to the end:
It should also be noted that China’s treasury holdings peaked in July 2011, and began dropping thereafter, at the exact moment that the US had it’s so-called debt-ceiling standoff. Which means that the debt-ceiling standoff may have done what even the financial crisis of 2008 could not: make US government debt look like a bad investment in the eyes of its most important creditor.