China more than doubled its direct holdings of South Korean treasury bonds in recent months as it turned to regional markets to invest some of its $2,450bn in foreign exchange reserves in currencies other than the US dollar and the euro.

Chinese holdings of Korean treasury bonds stood at Won3,990bn ($3.4bn) by the end of the June from Won1,870bn at the end of last year, according to the South Korean Financial Supervisory Service, the country’s financial watchdog.

The composition of China’s foreign exchange reserves, the largest in the world, are a closely guarded secret. The only Chinese investor allowed to make sizeable offshore bond purchases is the State Administration of Foreign Exchange (Safe), which manages the reserves under the central bank.