China raised its massive US government debt holdings for the first time in six months in March amid soaring foreign bond purchases on the back of European debt concerns, official data showed Monday.

The Chinese government, the top holder of US government debt, raised its long-term Treasury holdings to 895.2 billion dollars, up 17.7 billion dollars from February, the Treasury Department said in its latest monthly report on global capital flows in the world's largest economy.

The last time China increased its bond holdings was in September 2009.

China had cut its massive US Treasury bond holdings to the lowest level in at least nine months in February as Beijing resisted persistent US pressure to revalue its currency.

Net foreign purchases of US long-term securities leaped to a record 140.5 billion dollars in March from 47.1 billion in February, the Treasury data showed, amid mounting concerns about the Greek sovereign debt crisis.

"Motivated by safe-haven concerns and worries about the Greek debt crisis, private foreign investors increased their purchases of US Treasury bonds and notes, government agency bonds, and even private corporate bonds," said Tu Packard, a senior economist at Moody's Economy.com.

"This not only is a strong vote of confidence in the US economy, but also speaks volumes about the extent of investor unease with policy management of the European sovereign debt crisis and the implications for the world economy."

Japan, the world's second-largest economy and the number-two holder of Treasuries, increased its holding to 784.9 billion dollars from 768.5 billion, according to the Treasury International Capital (TIC) data.

Britain, the third-biggest holder, also was a net buyer, bumping up its holding to 784.9 billion dollars from 768.5 billion in February.

"Most of the demand for Treasuries came from the private sector as foreign central banks bought dollars at a far more modest rate. This suggests that private investors began to move money into the safety of US dollars in March," said Kathy Lien, research director at Global Forex Trading.

News of the record amount of demand for US dollar-denominated assets in March came as the euro sank to a four-year low against the dollar Monday amid concerns about sovereign debt problems in Europe.

The strength of the demand for Treasuries suggested that "the April and May data could be even stronger as central banks increase their pace of diversification out of euros," Lien said.

Michael Woolfolk at Bank of New York Mellon said the TIC data bode well for the budding US recovery from the worst recession in decades.

"These are positive developments for the funding of the US trade deficit and support for the dollar," he said.

The Treasury report came amid US and international pressure on Beijing to revalue the Chinese currency, the yuan, and ahead of key bilateral talks next week.

President Barack Obama's administration accuses Beijing of keeping the yuan undervalued to gain a trade advantage that has caused an enormous trade deficit with the Asian giant, which rose to 17 billion dollars in March.

On Monday, a Chinese commerce ministry spokesman, Yao Jian, defended the yuan's value.

"The improvement of the yuan's exchange rate regime is the Chinese government's own business," Yao told a news conference.

He had been asked to respond to comments by US Treasury Secretary Timothy Geithner, who said he expected China would allow the yuan — effectively pegged at about 6.8 to the dollar since mid-2008 — to rise against the greenback.

Geithner and US Secretary of State Hillary Clinton will meet their Chinese counterparts in Beijing for US-China Strategic and Economic Dialogue talks on May 24-25.

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