China is actively reducing its holdings of U.S. Treasuries, continuing a long-term, multi-year trend driven by a strategy to diversify foreign reserves and reduce reliance on the U.S. dollar. As of early 2026, China has been a net seller for nine straight months, reducing its holdings to the lowest level since 2008.
Key Details on China's Treasury Reduction:
Declining Position: Once the largest foreign holder, China has fallen to the third-largest creditor behind Japan and the United Kingdom.
Recent Sales: Reports in February 2026 indicate Chinese regulators instructed banks and financial institutions to curb their exposure to U.S. debt, citing high concentration risk and market volatility.
Total Holdings: China's holdings dropped to approximately $683 billion as of November 2025, continuing a steady decline from its peak.
Motivation: The reduction is part of a broader "de-dollarization" push to diversify into other assets, such as gold, driven by geopolitical tensions and economic strategies.
While some of these sales might represent a transfer of assets to other custodians (such as in Belgium), the overall trend indicates a conscious effort to move away from, or at least hedge against, U.S. government debt.
Major holders of U.S.T.'s, November, 2025
Comments
Total foreign holdings of US Treasury seem stable over the 11/2024 - 11/2025. So, many countries have stable holdings, some are increasing, some are decreasing.
Japan is #1 and is increasing holdings. But that didn't provide Japan much advantage in the US-Japan trade deal.
As the footnote in the Treasury link notes, the data in the table is only from the Treasuries held at US-based custodians and broker-dealers. Treasury doesn't know how much Treasuries, say, China may be holding through non-US firms. The link below shows (using data from Bloomberg and Treasury) that China also holds substantial amounts of US Treasuries through firms in Brussels. So, if one adds Treasuries held by China with firms in US (orange bars) and Brussel (pink bars), the total has been stable over the years.
This also explains why some countries such as Cayman Islands and Luxembourg hold so much US Treasuries - they are probably held for other countries.
https://pbs.twimg.com/media/HAuDpHqWAAAatSw?format=jpg
The graphic is a guesstimate of the amount of Chinese money invested in Treasuries via Belgium. It looks like a reasonable guess, but it is still a guess. From one of the recent (Feb 11) Bloomberg pieces on this topic (not paywalled): https://www.fa-mag.com/news/china-s-years-long-retreat-from-treasurys-flags-bigger-risks-85841.html
As one can read from the Treasury table, or see more clearly from the graphics in this (Feb 10) Atlantic Council piece, over the past year Chinese Treasury holdings decreased by $86B while Belgium's increased by $119B. 3/4 of Belgium inflow would have to be attributable to China for Chinese holdings to have remained stable. Not unreasonable but also hard to verify.
Where did all the petrodollars go? Gold, at least in part. https://www.visualcapitalist.com/central-banks-now-hold-more-gold-than-u-s-treasuries/ A Chinese expression 美金 can be taken as US paper money, yellow gold. That is, one stashes cash in Treasuries and gold. Now that's tipping toward gold.
I think that Bloomberg guesses are coming from also looking at the data from central banks or governments that are published by other countries. So, what is happening globally is that some countries are holding US treasuries, but just not through US firms. The rationale behind may be that those would be outside of US sanctions/freezes.
There was an interesting case for frozen Russian assets held in Brussels (US Treasuries may or may not be involved). EU decided to use some of those assets for its promised aid to Ukraine. Russia threated to sue. Brussels singlehandedly backed off when it found that only Belgium, and not the EU as a whole, could be held liable.