Renowned economist Mohamed El-Erian has signaled a major structural shift in global finance as China’s share of the U.S. Treasury market plummeted to a 15-year low, raising concerns over future demand for American debt.
Data shared by El-Erian reveals that China’s holdings of U.S. Treasuries now represent just 7% of the total market share—a staggering drop from the 28% peak recorded 15 years ago. The total holdings have fallen to approximately $682.6 billion, the lowest level since 2008.
“As illustrated in these MacroMicro charts, China’s holdings of US Treasuries have continued to fall,” El-Erian noted in a post on X.
He emphasized that the decline is even more pronounced when viewed against the backdrop of a “steady issuance of new securities by the US government.”
As illustrated in these MacroMicro charts, China’s holdings of US Treasuries have continued to fall.
Given the steady issuance of new securities by the US government, China’s share of total UST holdings has dropped even more — to 7%, a quarter of the 28% peak reached 15 years… pic.twitter.com/vagpQgsxuy
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Based on the data from the Federal Reserve Bank of St. Louis, here are the percentage changes in 10-year Treasury yields as of Feb. 12, 2026. The current 10-year Treasury yield stands at 4.09%.
Lookback Period
Historical Date
Historical Yield On 10-Year Treasury
Percentage Change
Absolute Change
5-Year
Feb 12, 2021
1.20%
+240.83%
+2.89 pp
10-Year
Feb 12, 2016
1.74%
+135.06%
+2.35 pp
15-Year
Feb 11, 2011
3.64%
+12.36%
+0.45 pp
Source: FRED
5-Year Change: The most dramatic increase, with yields more than tripling from historically low pandemic-era rates of 1.20% to 4.09%
10-Year Change: Also substantial growth of 135%, reflecting the long-term recovery from the ultra-low rate environment of 2016
15-Year Change: More modest increase of 12.36%, as the 2011 yield of 3.64% was already relatively closer to current levels
The retreat coincides with a broader Chinese strategy to reduce reliance on the U.S. dollar amid heightening geopolitical tensions.
As the U.S. national debt approaches $39 trillion, Beijing has reportedly advised its domestic banks to limit their exposure to Treasury securities, pivoting instead toward gold and other hard assets. China’s gold reserves have now risen for 15 consecutive months, reaching a record 2,308 tonnes.
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Analysts suggest this de-risking is a direct response to the weaponization of the dollar, following the 2022 freezing of Russian assets.
By cutting its stake to “a quarter of the 28% peak,” China is signaling a permanent shift away from being the primary financier of American deficits.
The alarm sounded by El-Erian centers on who will absorb the massive supply of new debt as traditional “anchors” like China retreat.
While demand from Japan and the UK remains steady, the loss of China’s massive buying power could lead to higher borrowing costs for the U.S. government.
If foreign demand continues to thin while the U.S. runs a trillion-dollar trade deficit, the resulting pressure on interest rates could threaten the delicate equilibrium of the global financial system.
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Economist Peter Schiff said that China’s move will mainly prompt the Federal Reserve to buy the bonds, creating inflationary conditions for consumers.
China has advised its banks to sell U.S. Treasuries. That is very good advice. Soon foreign governments and many private investors will be selling U.S. Treasuries. The main buyer will be the Fed, creating inflation that will send consumer prices soaring. https://t.co/GGNU9tT9EQ
As of Friday’s close, the Dow Jones index rose 2.31% year-to-date, whereas the S&P 500 was 0.33% lower and the Nasdaq Composite index was down 2.97% in 2026.
The SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 index and Nasdaq 100 index, respectively, closed higher on Friday. The SPY was up 0.07% at $681.75, while the QQQ declined 0.21% to $601.92.
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This article Mohamed El-Erian Sounds Alarm As China’s US Treasury Share Hits 15-Year Low At 7% originally appeared on Benzinga.com