China’s reported desire to slow its Treasury purchases briefly generated a lot of attention. (China subsequently denied the report ).
China’s Treasury holdings have basically followed its reserves, so if reserves were likely to be more or less stay stable in 2018, there was no particular reason for China to be a significant (net) buyer of Treasuries.
China’s 2017 purchases reflected, in my view, a desire to rebuild its Treasury portfolio after it had been depleted by China’s need to sell its more liquid assets when its reserve were under pressure in 2016 rather than anything more fundamental.
The flurry of attention quickly subsided once the Treasury market stabilized—as, well, no one who is watching China closely really thinks China is about to sell a ton of Treasuries. And if it did want to sell for financial reasons, it presumably wouldn’t want to broadcast that fact.