Why China's US debt holdings is at 17-year low
What's the story
China has reduced its holdings of US Treasury bonds to a 17-year low, amid unsettling ties with Washington. The country's holdings fell from $688.7 billion in October to $682.6 billion in November last year, according to data from the US Department of the Treasury. This is the lowest level since 2008 and comes as foreign ownership of US debt hits record highs, with Japan and the UK increasing their stakes.
Diversification strategy
Strategic shift in reserve allocation
China, which holds the world's largest foreign exchange reserves at $3.36 trillion as of December 2025, is strategically shifting its reserve allocation toward gold and overseas equity investments. Xi Junyang, a professor at Shanghai University of Finance and Economics, told Global Times that this reduction in US Treasury holdings is part of an optimization and diversification trend seen in recent years.
Reserve expansion
China's gold reserves continue to grow
Despite cutting its US debt holdings, China is expanding its foreign exchange assets to boost gold reserves. The People's Bank of China (PBC) reported that the country's gold reserves stood at 74.15 million ounces by December-end, a jump of 30,000 ounces from November. This marks the 14th consecutive month of growth for the central bank's gold reserves.