Korean bonds. China’s holdings of South Korean government bonds doubled in the first half of 2010, Bloomberg reports.

The purchases amount to just a “drop in the pond,” one analyst tells Bloomberg, given China’s $2.5 trillion in foreign reserves. But the shift shows the Chinese, the biggest holders of U.S. Treasury debt, are searching for new places to invest their foreign exchange reserves, which have grown at an enormous clip over the past decade and are held overwhelmingly in dollars.

China has also been buying Japanese bonds, which has helped to send Japanese government bond yields to their lowest levels since 2003. At the same time, the Chinese have trimmed their Treasury stake by almost $100 billion over the past year. 

The next milestone on the diversification road could come as soon as September. If the trends seen in recent months hold up, with China selling Treasurys and Japan buying, the Japanese could retake their spot as the top foreign holder of U.S. government bonds.

China has held that distinction, such as it is, since September 2008.