China has cut its holdings of US Treasury securities to a 17-year low, reinforcing a steady shift in its foreign exchange reserve strategy towards gold and diversified global assets amid prolonged economic and geopolitical tensions with Washington.
According to data released by the US Department of the Treasury, China’s US Treasury holdings declined to USD 682.6 billion in November 2025, down from USD 688.7 billion in October. This marks the lowest level since 2008 and continues a long-term downward trend from China’s peak holding of over USD 1.3 trillion more than a decade ago.
China’s reduction came at a time when overall foreign ownership of US government debt touched a record high. Japan and the United Kingdom increased their exposure, with Japan’s holdings rising by USD 2.6 billion to USD 1.2 trillion, while the UK added USD 10.6 billion to reach USD 888.5 billion, the Treasury data showed.
China currently holds the world’s largest foreign exchange reserves, totalling USD 3.3579 trillion at the end of December 2025, according to official media reports. Analysts say the cut in US debt is part of Beijing’s broader effort to rebalance its reserve portfolio towards assets considered safer and less exposed to US financial and political risks.
Xi Junyang, professor at the Shanghai University of Finance and Economics, said the decline reflects a strategy of optimisation and diversification of foreign assets aimed at improving the overall stability and safety of China’s reserves. He noted that exposure is being redirected towards gold, non-US currencies and overseas equity investments.
Shao Yu, chief economist at Fudan University’s Sci-tech Innovation Management Research Centre, said China appears determined to further reduce its US debt exposure amid rising concerns over the sustainability of US government borrowing. He compared the growing US debt cycle to a structure reliant on continuous refinancing, adding that Beijing is unwilling to remain heavily invested in such a system.
Alongside the reduction in US Treasuries, China has continued to expand its gold reserves. Data from the People’s Bank of China showed gold holdings reached 74.15 million ounces by the end of December 2025, up by 30,000 ounces from the previous month. This marked the 14th straight month of gold accumulation.
Experts expect China to continue increasing gold reserves as part of efforts to strengthen financial resilience and reduce vulnerability to external shocks.