China has steadily reduced holdings of US Treasury bonds over the last decade amid growing spat with Washington over issues ranging from trade, and access to technology to Taiwan. The official data from the US Treasury showed that China's holdings of treasuries have declined to a 17-year low of $688.7 billion in October 2025. It is down by $95.5 billion or 12% from a recent high of $784.3 billion in February 2025, and $628 billion or 48% from a peak of $1.32 trillion in November 2013, according to Jefferies' analyst Christopher Wood.
"GREED & fear has heard in recent days commentary in America that China has accelerated its selling of US Treasuries," Wood said in a recent note. Still, he added, the pattern does not show any clear recent acceleration in the pace of decline in China's holdings.
"Indeed, prior to the pause in 2024, China's holdings declined by $334.6 billion or 30% from a high of $1.104 trillion in February 2021 to $769.6 billion in October 2023," he said.
Countries typically park dollars earned through trade in US government bonds that are rated among the safest investment instruments. However, the sustained high fiscal deficit in the US and concerns over the independence of the Federal Reserve have dampened global appeitite for Treasuries and moved central banks to accumulate gold and other foreign currencies like the euro.
Moreover, many countries have been diversifying their forex reserve holdings away from the dollar to shield from economic shocks coming from Washington's frequent impostition of unilateral sanctions on adverseries like Russia, Iran and Venezuela.
China-US Rivalry
China and the US have been locked in great power competition since President Barack Obama pivoted American foreign policy from Middle East to Asia during his term. Under Donald Trump, the US has imposed tariffs on China and made technology transfer rules more strict. It has restricted the sale of advanced semiconductors used in most modern devices from electric vehicles to autonomous weapons systems.
Beijing has reponded by using its global dominance in critical minerals and magnets as leverage in trade negotiations. The country has also ramped up pressure on Taiwan and US allies Japan and the Phillipines in its pursuit of strategic hegemony in the region.
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