China's US Treasury Holdings Have Fallen by More Than Half From Their Peak, to the Lowest Level Since 2008
A decade-long drawdown
China has been quietly reducing its US debt exposure for years. Its holdings of US Treasuries have fallen by more than half, from a record $1.32 trillion in 2013 to $618 billion in July, the lowest level since 2008, according to US Treasury data. China has slipped to the third-largest foreign holder of US debt, behind Japan and the United Kingdom.
Steady selling, not a sudden exit
The reduction has been gradual and persistent rather than a single dramatic sale. The annual pattern tells the story: roughly $173 billion sold in 2022, $51 billion in 2023, $57 billion in 2024, and about $76 billion more through 2026 so far. China started 2026 holding $695.3 billion and cut $15.4 billion in July alone to reach the $618 billion reading, per Treasury International Capital data.
Other buyers have been absorbing the supply. Total foreign Treasury holdings stood at $9.248 trillion in July: Japan remained the largest holder at about $1.104 trillion despite trimming its position, while the United Kingdom climbed to $998.3 billion after adding $58.4 billion in the month. Analysts generally attribute Beijing's drift to diversification away from dollar assets amid geopolitical tension and US fiscal concerns, rather than to any single month's politics, and custody data can also mask holdings routed through third countries such as Belgium.
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Every marginal foreign buyer that steps back is a marginal bid the Treasury has to find elsewhere, which keeps the long end in focus: TLT and the 30-year auction tail are where a real demand problem would show up first, and the dollar in UUP wears the diversification narrative. So far the offsets from the UK, Canada and others have kept total foreign holdings from falling off a cliff, so the trade is a slow pressure, not a cliff edge.
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