'China faces a dilemma' in US Treasuries

Beijing shouldn't stop buying bonds yet despite risk, analyst says

NEW YORK / BEIJING - China has "little choice" but to continue buying US Treasury bonds in the short term despite the potential risk of Washington defaulting on its obligations to foreign bondholders, analysts said on Tuesday.

China, the largest foreign holder of US Treasuries, increased its holdings by $7.3 billion to $1.16 trillion for the second straight month in May, according to the US Treasury Department.