China, the largest foreign creditor to the U.S., increased itsownership of Treasuries in October to almost the record levelreached in July 2011 after the Federal Reserve unexpectedly optednot to slow bond buying.

Holdings rose $10.7 billion, or 0.8 percent, to $1.304 trillion,according to Treasury Department data released yesterday. Chinaheld a record $1.314 trillion in July 2011. Total foreign holdingsof Treasuries rose $600 million, or 0.01 percent, in October to$5.65 trillion.

Fed officials surprised traders and roiled markets across theglobe on Sept. 18 by maintaining $85 billion in monthly purchases.Policy makers won't start curtailing quantitative easing this week either,according to 66 percent of economists surveyed Dec. 6 by Bloomberg.China's demand for Treasuries rose as foreign currency reservesjumped 4.7 percent in the July-September period and the People'sBank of China sought to keep the yuan within its managed tradingrange.