It's one of the top stories on all the financial news sites: China "worried" about US Treasury holdings - AP China "worried" about safety of U.S. Treasuries - IHT White House Seeks to Reassure China U.S. Debt Safe, Deficits Under Control - Bloomberg China's premier worried for U.S. investments Most analysts estimate that China has $1 trillion invested in U.S. Treasuries and notes. That's roughly half of its currency reserves... And if China decides to sell them - at least, if they sell them all at once - it could slash T-bill values. That would ultimately slash creditor's reserves, though, which would be a little like self-mutilation. I'm not alone in thinking that the move away from T-bills will be more like blood-letting than amputation... And some emerging markets are actually still interested in buying U.S. Treasuries. Russia, for instance. On March 4, 2009, Russia became the 5th largest U.S. creditor with a total of $116 billion in U.S. T-bills in its coffers. Martin Walker, Senior Director at A.T. Kearney GBPC, told RussiaToday, "U.S. Treasury bonds are being bought by people all over the world, not because they are good returns but because they are the least bad asset around." They have no risk of default, say experts, because the U.S. is the only country with foreign debt denominated in its own currency. That means the threat to T-bills comes from inflation - which would reduce demand. We're already seeing some slide in demand, as China has been talking about using its reserves to invest in its own economic development - and in the securing of commodities to fuel its own growth - rather than to buy U.S. Treasuries. We've spoken about that here before, but I want to let you in on an idea my colleague Christian DeHaemer told me about in the office today. Chris is the editor of BreakAway Investor, and he's been researching the links between China and Russia recently. Since both are heavily invested in U.S. Treasuries, it's an interesting comparison to make. One of the more secretive connections is the news from March 6, 2009 that Industrial and Commercial Bank of China (ICBC) (601398:Shanghai) took a 20% stake in South Africa's largest lender, Standard Bank (SBK:JSE). That deal was worth $5.5 billion. Doesn't sound like much of a Russia-China connection until you read that also on March 6, 2009, Standard Bank announced it would purchase a 33% stake - worth $200 million - in Troika Dialog, a Russian investment bank. Troika has strong connections with Russia's state-owned companies, which means oil companies and mining companies... All of which we know China's been seeking connections with all over the world. With oil back on the rise, and China with a ton of cash to spend on oil and other commodities, these types of business ties could spell a bit of a resurgence for roughed-up Russia. I know Chris told me that it's almost time to be bullish on Russia again... But I'm sure he'll explain all of that in his next BreakAway Investor issue. If you're not a member, you can join by clicking this link...