Experts are calling for a more flexible yuan exchange rate and further opening of the capital account to ease pressure on the country's massive foreign exchange reserves, as China's holdings of United States' government debt hit a record high.

As the biggest foreign creditor to the US, China increased its holdings of US Treasury bonds for the fifth consecutive month in May to $1.32 trillion, even as foreign demand for the securities fell for a second consecutive month, according to new data from the US Treasury on Tuesday.

Japan, the second-largest buyer, trimmed its holdings by 0.2 percent to $1.11 trillion, while foreign investors as a whole decreased their holdings by $39.2 billion, said the Treasury report.