China and Saudi Arabia have both increased their holdings of US treasuries. China increased their holdings of US treasuries by US$28 billion in March – this is the first significant increase in well over a year, as China sought to decrease their position during 2016 faced with a weakening renminbi.

Saudi Arabia has steadily increased their position since September 2016, looking to diversify away from oil in the run-up to Trump’s state visit this month, which resulted in a slew of US-Saudi arms deals.

China recently increased their position on US treasuries for the first time since early 2016, when China’s holdings of US treasuries jumped by US$14 billion from US$1.238 trillion in January 2016 to US$1.252 trillion in February of the same year.

Throughout 2016, China then drastically reduced their position amid a strengthening dollar and weakening renminbi. However, their position since stabilised in November 2016.

In March 2017 China’s US treasury position increased by almost US$28 billion – equivalent to the total GDP of Paraguay, according to World Bank Data – from US$1.059 trillion to US$1.087 trillion.

China’s foreign exchange reserves (of which about a third is made up of US treasuries) also rose during this period, from US$2.998 trillion in January, to US$3.009 trillion in March. The rise US$11 billion from January to March compares to a rise of US$37 billion in the same period for US treasuries alone (US$1.051 to US$1.088 billion, January to March).

For Saudi Arabia, their holdings of US treasuries increased to US$114.4 billion in March, steadily increasing from the from a low of US$89.4 billion in September last year (an increase of about 25%), making Saudi Arabia the 12th largest investor in US treasuries. However, compared to 12 months ago, the Saudi position remains unchanged.

The increase comes in the run-up to President Donald Trump’s state visit to Riyadh – and his first trip outside the US at all – in which he told Arab and Islamic leaders to drive out extremists and unite against terrorism. The meeting also included US$110 billion in deals, in which Riyadh will buy arms from the US, signalling a tighter Saudi-US security and economic partnership.

Elsewhere in Asia, US treasury holdings of Taiwan, Singapore, and India remained roughly level, although Hong Kong experienced a dip in their treasury holdings throughout 2016, only to return to similar early-2016 levels at the start of 2017, in a similar trend to Saudi Arabia.

Explaining the recent interest for US treasuries, US treasury yields have also improved steadily since the start of the year, with interest rates moving from roughly one month 0.5% in January, to 0.7% in May. Over the same period, three months moved from around 0.5% to 0.9%; six months 0.65% to 1%; and one year from 0.9% to 1.1%, according to US Treasury department data.