China emerged as the No. 1 investor in Korean bonds, relegating the U.S. to the second spot, a move seen as part of its investment portfolio adjustment, the country's main bourse said Thursday.

At the end of February, China owned 17.5 trillion won ($14.9 billion) worth of Korean bonds, followed by the U.S. with 14.4 trillion won, Switzerland with 13.2 trillion won and Luxembourg with 10.2 trillion won, according to the Korea Exchange (KRX).

In the 2014-2015 period, China was the second-largest holder of Korean bonds following the U.S. which owned more than 18 trillion won at the end of 2015.

Last month, foreign investors sold 4.23 trillion won worth of bonds, compared with a sell-off of 487 billion won the previous month, to rebalance their investment portfolios amid extended market volatility.

But China bucked the sell-off trend to buy Korean bonds for future gains, according to the KRX.

In terms of stocks, the U.S. was on top by holding 161.7 trillion won worth of Korean shares in February. China had Korean stocks valued at 8.4 trillion won last month, it said. (Yonhap)