China is one of the largest foreign holders of US debt, with a significant portion of its foreign reserves invested in US treasury bonds. China holds around $1.06 trillion dollars in US debt making it second largest foreign holder after japan and third largest after US citizens.
China's holdings of US debt are a result of its massive surplus with the United States, which has allowed it to accumulate large amounts of US dollars. To prevent the value of its currency, The Yuan, to appreciate too much against the dollar, china has used some of its dollars to purchase US treasuries.