Photo shows US dollar banknotes in Washington, DC, the United States. Photo:Xinhua
Data released by the US Department of the Treasury on Thursday local time showed that in July 2025, China reduced its holdings of US Treasuries by $25.7 billion, bringing the total down to the lowest level since December 2008, according to Reuters.Â
This marked the fourth reduction of US Treasury holdings by China this year, with the holdings in July recording at $730.7 billion.Â
In contrast, Japan increased its holdings by $3.8 billion in July to $1.1514 trillion, remaining the largest foreign holder. The UK raised its holdings by $41.3 billion to $899.3 billion in July, maintaining its position as the second-largest holder, according to Reuters.Â
So far in 2025, China increased its US Treasury holdings respectively in January, February, and June. Overall, since April 2022, China’s holdings have remained below $1 trillion and have generally shown a downward trend.
China’s adjustments to its US Treasury holdings are made in a gradual and prudent manner, Xi Junyang, a professor at the Shanghai University of Finance and Economics, told the Global Times on Friday, adding that the moves are based on changes in market conditions and are aimed at protecting China’s assets. Â
Xi Junyang further noted that, from a foreign exchange reserve management perspective, a measured reduction in US Treasury holdings helps improve the currency composition of China’s reserves, advance diversification, and strengthen the overall safety and stability of the portfolio.
China’s foreign exchange reserves stood at $3.3222 trillion at the end of August 2025, an increase of $29.9 billion, or 0.91 percent, from the end of July, according to data released by the State Administration of Foreign Exchange (SAFE).
Li Bin, deputy head and spokesperson for the SAFE, said on Friday that China’s foreign exchange market remained active in August, with supply and demand broadly balanced and market expectations stable.
Global Times