BEIJING - China shrank its holdings of US Treasury debt by $11.2 billion to $895.6 billion in November after increasing the portfolio for four straight months, though it remains the largest foreign holder, according to the US Treasury Department on Tuesday.

Zhang Monan, a researcher with the State Information Center, said the net selling is a natural move to control risks as the US monetary easing policy is set to dilute the value of the dollar and China's dollar assets in the longer term.

"Although China may increase the holdings from time to time in accordance with the market situation, in the long term there is a tendency that the country will further diversify its foreign exchange portfolio," she said.