China’s official holdings of U.S. government bonds rose for the first time since last September, the Treasury Department said Monday. 

China bought a net $18 billion worth of Treasury bills, notes and bonds in March, according to the monthly Treasury International Capital report. That brings its world-leading Treasury hoard to $895 billion. 

The Chinese weren’t alone. Japan, the second-biggest holder of Treasury debt, bought $16 billion worth of Treasurys in March to bring its total to $785 billion. The biggest increase in Treasury holdings came in the U.K., where purchases of $66 billion brought the total holdings to $279 billion. 

All told, foreigners bought a net $158 billion of Treasury debt in March – triple February’s purchases. 

The Treasury report is worth keeping an eye on because the U.S. borrows on international debt markets to finance its deficit spending. The government is expected to run a budget deficit north of $100 billion a month this year, as tax collections sagged during the recession and spending on unemployment benefits and the like surged. 

The current account deficit, a measure of the trade gap, narrowed during the recession as Americans cut back on imported goods. But it widened in March to $40 billion, as demand for imports recovered faster than that for the goods the United States sells abroad. 

These reminders of U.S. profligacy often give rise to dire warnings that the Chinese may soon tire of financing American borrowing. But obviously, the Chinese benefit from this relationship as well: Selling goods into U.S. markets creates jobs at home, and the proceeds have to go somewhere. 

“From 1980-2009, China’s cumulative trade surplus with the U.S. was nearly $2.1 trillion,” writes Derek Scissors of the Heritage Foundation. “There is not nearly enough gold, iron, or even oil to buy — some money must go back into American bond and stock markets, the only ones in the world big enough to absorb China’s trade earnings.” 

What’s more, the official Treasury report gives just a glimpse of the actual activity by foreign buyers. Observers say China also buys U.S. assets through buyers in London and Hong Kong, so the official tally understates its holdings. 

Whatever the actual number for Chinese Treasury holdings, it is clear that right now the U.S. is not facing a funding crisis. Just the opposite, in fact: the prospect of a meltdown in Europe this month sent investors scurrying into Treasury debt with renewed abandon. The 10-year Treasury yield, which hit 4.01% in early April after spending much of March around 3.75%, has recently fallen below 3.5%. 

All this offers another suggestion that though the United States faces huge financial challenges, figuring out what the Chinese will do in the bond markets isn’t one of them. 

“Huge American deficits are terrible policy and should stop,” Scissors writes. “But the U.S. can continue them without China.”