China has cut its US Treasury holdings to levels not seen since the 2008 financial crisis, accelerating a years-long pivot away from dollar-denominated assets and into gold.
US Treasury Department data puts China’s holdings at $694.4 billion as of January 2026 — down 47% from a November 2013 peak of $1.316 trillion. China ranks third among foreign holders of US debt, trailing Japan at $1.185 trillion and the United Kingdom at $866 billion.
The sell-down has been deliberate. China shed $173.2 billion in 2022, $50.8 billion in 2023, and $57.3 billion in 2024 from its Treasury portfolio, with holdings hitting a cycle low in July 2025 before recovering slightly into early 2026.
As it exited Treasuries, the People’s Bank of China bought gold for 16 consecutive months through February 2026, pushing official reserves to 74.15 million troy ounces — roughly 2,309 metric tonnes. Gold now comprises 7% to 10% of China’s total foreign exchange reserves, depending on the valuation benchmark.
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The State Administration of Foreign Exchange reported total foreign exchange reserves of $3.357 trillion at the end of December 2025 — signaling that the move was a strategic shift, not capital flight.
The 2022 Western freeze of approximately $300 billion in Russian foreign reserves accelerated Beijing’s thinking. That decision exposed the risk of holding large dollar-denominated positions subject to US jurisdiction, and China has moved accordingly.
Foreign investors now hold just 32.4% of outstanding US Treasuries — the lowest share since 1997, per Morgan Stanley analysis of Federal Reserve flow-of-funds data — down from more than 50% at the peak of the 2008 financial crisis.
Read: Foreign Ownership of US Treasuries Falls to Lowest Share Since 1997, With No Floor in Sight
The Iran war has sharpened the retreat: after US and Israeli forces struck Iran on February 28, foreign monetary authorities sold Treasuries for five consecutive weeks, pulling New York Fed custody holdings down by more than $90 billion to a 2012 low. Oil-importing nations — Turkey, India, and Thailand — led the selling, liquidating dollar reserves to defend weakening currencies and cover surging energy import bills.
The 10-year Treasury yield jumped 35 basis points in March, its biggest monthly move since President Trump returned to office, even as the US faces refinancing $10 trillion in maturing debt over the next 12 months.
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