China Cuts Back on U.S. Treasury Holdings Amid Financial Caution
Chinese regulators have instructed the nation’s largest banks to reduce their exposure to U.S. Treasury bonds, marking a significant step in China’s ongoing “de-risking” strategy. According to the latest Treasury data from early 2026, China now holds about $682.6 billion in U.S. debt, down from a peak of $1.32 trillion in 2013—effectively halving its position over the past decade.
The directive asks banks to limit new purchases and scale back oversized holdings. With U.S. fiscal deficits climbing and interest rates uncertain, Beijing aims to shield domestic lenders from sudden shifts in U.S. bond markets. Meanwhile, Japan and the United Kingdom have increased their Treasury holdings to record levels, partially offsetting China’s retreat.