disagree. chief washington correspondent james rosen has the story. reporter: when vice president biden visited beijing in early december, china had just capped a month in which it increased its holdings of u.s. treasuries by more than 12 billion, treasury department figures show. those moves helped china, already the largest foreign holder of american debt, reach a total stake worth $1.3 trillion. harder to quantify is whether all this is inhibiting the free exercise of u.s. foreign policy. china has been willing to lend us a lot of money over the last decade. so we are in a sense dependant on them to finance our shortfalls. on the other hand, if they started selling their treasuries on a large scale, the value of the treasuries would decline, and they would have a very large financial loss, so you might think they have got some leverage, but it s really hard to see how they are going to exercise it. reporter: most analysts agree china is using its foreign exchange reserves to m