According to Reuters, citing a statement from China's foreign exchange regulator, The State Administration of Foreign Exchange (SAFE), the report on usa bond purchases "could be based on erroneous information".
The State Administration of Foreign Exchange, one of the biggest holders of Treasurys, said it is a "responsible investor" for both the reserves and "participating markets".
The market for US government bonds is becoming less attractive relative to other assets, and trade tensions with the USA may provide a reason to adjust the pace of purchases, the thinking of these Chinese officials goes, according to people familiar with the matter cited by Bloomberg. While China has about a fifth of all foreign-held USA debt at $1.2 trillion, making it the largest single holder, it's not clear how much of a sustained impact a Chinese retreat would have on US borrowing costs.
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"China has been diversifying its forex reserves investments and its investments in US Treasuries is market-driven", SAFE said on its website. The level rises and falls each month as Chinese currency regulators buy and sell dollars to maintain the exchange of Beijing's tightly controlled yuan.
China holds $1.2 trillion of the $14 trillion market in T-bills, according to official data, but the Financial Times says (paywall) some analysts "believe that the country also owns several hundred billion via other financial centers".
Like the initial report, financial markets have reacted hastily to the news, bidding up both the USA dollar and treasuries in response.