China's US Treasury holdings fell for a third consecutive month in August, the lowest since June 2017, according to data released by the US Treasury on Tuesday.

Between July and August, US Treasury bills, notes and bonds held by China fell by around six billion US dollars to 1.165 trillion US dollars.

China remains the largest holder of US Treasuries, followed by Japan, which has also been cutting its holdings. 

Between July and August, Tokyo's US Treasury bills, notes, and bonds also fell by around six billion US dollars, from 1.036 to 1.03 trillion US dollars.

While China and Japan reduced their holdings of US Treasuries, overall foreign holdings increased by 35.4 billion US dollars to 6.287 trillion US dollars, with Saudi Arabia boosting its holdings by 2.7 billion US dollars.

According to Xinhua, the US stance on trade with China is forcing investors to keep a close eye on China's holdings of US treasuries.

In response to market concerns that China could reduce its treasuries holdings as a countermeasure against US tariff actions on Chinese products, Chinese Vice Minister of Finance Zhu Guangyao said earlier this year that China is a responsible investor and respects international capital market rules.

"China manages its foreign exchange reserves via market operations in accordance with market rules, specific market principles and the principle of diversified investment," he said, citing remarks made by Chinese Premier Li Keqiang on forex reserves management in March.

(With inputs from Xinhua)