China’s US bond holdings fall to lowest since 2008 as other countries buy more

WASHINGTON / NEW YORK

China’s holdings of US Treasury bonds have fallen to their lowest level since 2008, even as total foreign ownership of US government debt continues to rise, according to data from the US Treasury Department.

China has continued a gradual withdrawal from the US bond market, marking a significant shift in the global debt landscape, while other countries have increased their Treasury holdings.

Foreign residents’ holdings of US Treasury securities rose from $8.6 trillion at the end of 2024 to $9.3 trillion by December 2025, an increase of about 7.5% over one year, the data showed.

About 42% of those holdings are owned by official institutions such as central banks, with the remainder held by private and institutional investors.

Japan remains the largest foreign holder of US Treasuries, with $1.2 trillion in holdings after increasing its portfolio by 11.7% year-on-year.

The UK ranks second with $866 billion as of December 2025, also up 11.7%, reflecting a growing role of London-based financial institutions in US public debt markets.

China, once the second-largest holder, continued to reduce its exposure. Its US Treasury holdings fell from $759 billion in December 2024 to $638.5 billion by the end of 2025, a decline of roughly 10% and the lowest level since September 2008.

Chinese regulators have reportedly advised financial institutions to limit their exposure to US Treasuries, citing concerns over concentration risk and market volatility.

Belgium and Canada were among the largest buyers during the period. Belgium’s holdings rose from $374.6 billion at the end of 2024 to $477.3 billion by the end of 2025, while Canada’s holdings increased from $378.8 billion to $468.1 billion over the same period.

Over a longer horizon, foreign ownership of US Treasury bonds has risen sharply. Global holdings were up 31% at the end of 2025 compared with the end of 2020, increasing from $7.1 trillion.

During that five-year period, Japan’s holdings declined by 5.3%, while the UK’s holdings surged 97% from $440.6 billion.

Chinese US Treasury holdings has steadily contracted over the same period, falling from about $1.1 trillion five years ago to a 36% decline by the end of 2025.

Belgium’s holdings rose 88% over five years, while Canada’s nearly tripled, according to the data.

Padhraic Garvey, regional head of research for the Americas at ING Financial Markets, told Anadolu that China has been a net seller of US Treasuries for several years, unloading about $400 billion in holdings since 2020.

Garvey said the shift reflects China’s shrinking current account surplus, a desire to reduce exposure to US government debt and possible geopolitical considerations.

He added that the trend has not destabilized markets, as strong buying from other countries has offset China’s reduced participation.

*Writing by Emir Yildirim in Istanbul