After the Fed began to scale back bond purchasing, yields on benchmark 10-year notes rose to 3 percent in December, the most since July 2011. Meanwhile, US government securities prices dropped 3.4 percent in 2013, the first annual decline since 2009's record 3.7 percent loss.

China cut its holdings of US debt in December by $47.8 billion — 3.6 percent — to $1.27 trillion from $1.32 trillion in November, the largest decline since December 2011, US Treasury data showed.

Most of China's cut in holdings was for short-term government bonds, which have declined by $43.1 billion, compared with $4.66 billion middle- and long-term ones.

By the end of December, the world's second-largest economy held a total of $1.26 trillion US government bonds, lower than the record high of $1.32 trillion at the end of November, as shown by US data.

"The tapering's effect on China's accumulation of reserves is mixed," said Kent Troutman, a research analyst at the Peterson Institute for International Economics.

Troutman said while he anticipates tapering will ease pressure on the People's Bank of China to accumulate reserves, a stronger US economic environment that allowed tapering to begin will create stronger US consumer demand, creating "appreciation pressure".

"Basically, the timing and intensity of these two factors — the investment channel and the trade channel — will determine how much appreciation pressure is created on the renminbi," Troutman said.

"The Fed's taper was widely anticipated and thus I do not think this resulted in a sudden stop of appreciation pressure on China. How the PBOC responds to that pressure going forward is another matter."

In response to the Fed's reduction of asset purchases, foreign sales of the US long-term securities reached $45.9 billion in December, up from sales of $29.3 billion in November.

The sum of all foreign acquisitions in December — including long-term securities, short-term securities, and banking flows — was a monthly net outflow of $119.6 billion, much larger than the $16.6 billion outflow recorded in November.

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