China's U.S. Treasury Holdings Fall to $590 Billion, Lowest Since 2008 Financial Crisis

Amid growing concerns about U.S. fiscal health, China and Japan reduced their holdings of U.S. Treasury securities in August. China’s holdings, in particular, fell to their lowest level in 18 years, since the 2008 global financial crisis. Meanwhile, the United Kingdom and Canada increased their holdings, pushing up the total amount of U.S. Treasuries held by foreign investors.

According to the U.S. Treasury Department on October 18 (local time), China held $590.7 billion in U.S. Treasuries at the end of August, down $27.3 billion from the previous month. Holdings fell for a third consecutive month and were down 15.5% from the same period last year. China’s holdings have been declining since peaking at $1.316 trillion in November 2013. In March last year, China fell from second to third place among the largest holders, overtaken by the United Kingdom.

U.S. President Donald Trump announces details of South Korea's investment in the United States on the 30th (local time). White House website.

The decline in China’s holdings is seen as reflecting concerns about U.S. fiscal health, U.S.-China trade tensions, and efforts to diversify foreign exchange reserves by increasing gold purchases. However, some observers believe China may be indirectly holding U.S. Treasuries through third countries such as Canada.

U.S. national debt surpassed $40 trillion (about 53 quadrillion won) for the first time in mid-August. The yield on 30-year U.S. Treasuries also rose to 5.34%, its highest level since 2007.

Japan, the largest holder, also reduced its U.S. Treasury holdings, from $1.1039 trillion in July to $1.0683 trillion in August. The decline continued for a fourth consecutive month, bringing holdings to their lowest level since December 2024.

By contrast, the United Kingdom’s holdings rose from $998.3 billion to $1.0095 trillion, surpassing $1 trillion for the first time. Belgium’s holdings also increased, from $470.7 billion to $490.5 billion, while Canada’s rose from $426.3 billion to $464.6 billion.

As a result, total foreign holdings of U.S. Treasuries increased by $83.3 billion, from $9.2484 trillion in July to $9.3317 trillion in August. Despite sales by China and Japan, increased holdings by other major countries drove the overall rise.

This content was produced with the assistance of AI translation services.