China's US Treasury Holdings Hit 18-Year Low in April 2026: Key Data and What It Means

Why China is selling

Beijing's decade-long divestment from US Treasuries is driven by several interconnected factors:

• Geopolitical tensions — Heightened uncertainty in US-China relations, including trade war escalation and conflict risks, has pushed China to reduce its financial exposure to the United States .
• Reserve diversification — China has been shifting its foreign-exchange reserves into gold at a record pace and into overseas equity investments as alternatives to dollar-denominated assets .
• Policy guidance — Chinese authorities have directed commercial banks to trim their Treasury positions as part of a broader strategic retreat from dollar assets .
• Iran war fallout — Broader geopolitical instability, including the US-Iran conflict, stoked currency fears that prompted central banks, including China, to sell Treasuries .

The share of total foreign holdings is shrinking

While China's absolute holdings fell to an 18-year low, its share of total foreign-held US Treasuries also dropped sharply. According to analysis by economist Mohamed El-Erian, China now holds roughly 7% of all foreign-held US Treasuries, its lowest level in 15 years, down from 14% at its peak and from a 28% share a decade and a half ago .

This decline is even more striking because overall foreign demand for US government debt remains robust.

Overall foreign demand for Treasuries rose

Total foreign holdings of US Treasuries rose to $9.353 trillion in April, up from $9.348 trillion in March, even as Chinese holdings fell . Foreign investors bought a net $103 billion in US securities in April, including Treasuries .

In other words, China's selling has been more than offset by buying from other major foreign holders.

Where Japan and the UK stand

The two largest foreign holders of US Treasuries both increased their positions in April, widening the gap with China:

Source: US Treasury TIC data, Trading Economics, Business Times

Japan remained the largest non-US holder, boosting its position to roughly $1.21 trillion in April, the highest level since early 2022 . The UK also increased its holdings to approximately $938 billion, widening its lead over China as the second-largest holder .

A decade-long trend

China's Treasury selloff is not a sudden move but a steady trend since 2013. After reaching a record $1.317 trillion in November 2013, the stockpile declined to below $800 billion by 2024, with intermittent small rebounds followed by renewed reductions . The pace accelerated in 2025 and 2026, with annual net sales of $75.5 billion in 2024 alone .

The pattern is clear: China is systematically reducing its exposure to US government debt, even as the rest of the world — led by Japan and the UK — continues to buy.

What it means

China's retreat from US Treasuries reflects a deeper transformation in global finance: the world's second-largest economy is actively de-dollarizing its reserves, diversifying into gold and other assets, and reducing its strategic dependence on the United States. For now, the void is being filled by Japan, the UK, and other buyers, but economists have noted that a sustained withdrawal by China could eventually put upward pressure on US borrowing costs .