CHINA SLASHES US TREASURY HOLDINGS TO 18-YEAR LOW AS AMERICA’S DEBT PROBLEM GROWS
China has cut its holdings of US Treasury securities by more than half since the 2013 peak. Official Treasury Department data shows Beijing’s portfolio fell from $1.32 trillion that year to $618 billion in July 2026 and further to roughly $591 billion in August. That is the lowest level since the 2008 financial crisis and drops China to the third-largest foreign holder behind Japan and the United Kingdom.
The reduction has been steady rather than sudden. China sold roughly $173 billion in 2022, another $51 billion in 2023, $57 billion in 2024, and about $76 billion through mid-2026.
These sales continued even as total foreign ownership of US Treasuries rose in recent months, with buyers in the UK and Canada offsetting some of the Asian selling.
Beijing’s move reflects a deliberate shift away from heavy reliance on dollar-denominated assets. Concerns over US fiscal policy, rising debt levels, and geopolitical tensions have accelerated the diversification of China’s reserves. The sales also coincide with slower Chinese economic growth and pressure on Beijing to manage its own domestic priorities.
America still finances a large share of its deficit through foreign buyers. When one of the biggest historical purchasers steps back, other investors must step forward or yields face upward pressure. The pattern underscores the long-term risk of depending on foreign governments to fund chronic US borrowing.
