China Reduces U.S. Treasury and Asset Exposure to Lowest in Over a Decade

China’s combined holdings of U.S. assets — including Treasuries, stocks and various bonds — have declined to around $1.56 trillion, marking levels not seen in roughly 14 years, according to recent data compiled by analysts. This trend reflects Beijing’s continuing strategy to diversify away from U.S. dollar-denominated assets while strengthening its own financial buffers and reducing reliance on the dollar-based system.

Official figures show China’s position in U.S. Treasury securities fell to around $688.7 billion in late 2025 — the lowest since 2008 — after years of gradual reduction from a 2013 peak of over $1.3 trillion. Analysts attribute this shift to reserve diversification, geopolitical tensions with Washington, and concerns about U.S. fiscal sustainability.

The move forms part of a broader de-dollarization narrative in which China has increased gold reserves and non-dollar holdings while reducing its exposure to U.S. sovereign debt and other dollar-linked assets. Although the overall U.S. Treasury market remains deep and liquid, China’s pullback highlights a long-term strategic pivot in global reserve portfolios.

Market Implication: Sustained reductions in Chinese and other foreign holdings of U.S. assets may gradually influence Treasury demand dynamics and add pressure on the dollar, though near-term volatility remains limited given the scale of global Treasury markets.