US treasury bonds 'still the best option'

China is likely to continue increasing holdings of US treasury bonds even after becoming the No 1 holder because it is the best way to deploy its $1.9 trillion foreign exchange reserves, economists say.

On Monday, US Treasury data showed that China had replaced Japan to become the top holder of US treasury debt in September.

With a $43.6 billion increase in holdings of US treasury securities in September, China's overall holdings amounted to $585 billion. Japan cut its holdings to $573 billion from $586 billion in August.