China Cuts US Treasury Holdings to Lowest Level Since 2008
China’s gradual withdrawal signals a notable shift in international debt markets, while other countries have increased their US Treasury portfolios. Total foreign holdings grew from $8.6 trillion at the end of 2024 to $9.3 trillion by December 2025, a roughly 7.5% year-on-year rise. About 42% of these holdings are managed by official institutions such as central banks, with the remainder in the hands of private and institutional investors.
Japan remains the largest foreign holder, increasing its Treasury portfolio by 11.7% to $1.2 trillion. The United Kingdom is second, holding $866 billion as of December 2025, reflecting a growing role for London-based financial institutions in US debt markets.
Once the second-largest holder, China reduced its US Treasury exposure from $759 billion in December 2024 to $638.5 billion by the end of 2025, a drop of about 10%. Regulators in China have reportedly advised domestic financial institutions to limit investments in US Treasuries due to concerns over concentration risk and market volatility.
This trend underscores a shifting dynamic in global debt markets, with China’s retrenchment offset by increased purchases from other major economies.
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