China Cuts US Treasury Holdings to $651.1 Billion, an 18-Year Low in April
Updated
Updated · South China Morning Post · Jun 19
China Cuts US Treasury Holdings to $651.1 Billion, an 18-Year Low in April
1 articles · Updated · South China Morning Post · Jun 19
Summary
$651.1 billion in April left China with its smallest US Treasury position since September 2008, down from $652.3 billion in March.
The reduction extends Beijing's reserve diversification as geopolitical tensions rose and investor concern deepened over the Federal Reserve's independence.
$9.353 trillion in total foreign Treasury holdings still edged up from $9.349 trillion, with Japan and the United Kingdom among major buyers.
April's backdrop included a fragile US-Israel-Iran ceasefire and scrutiny of Fed leadership after Kevin Warsh told senators he would not be the president's “human sock puppet.”
Is China truly ditching US debt, or are its secret 'shadow holdings' telling a different story?
After a costly war and a Fed policy reset, can US bonds still be the world's ultimate safe haven?
Will the new Fed-Treasury 'accord' limit America's ability to respond to future crises?
China's 18-Year Low in US Treasury Holdings: Shadow Holdings, De-Dollarization, and Global Market Impact
Overview
China's direct holdings of US Treasuries have dropped to an 18-year low, reflecting a steady move to diversify its foreign reserves amid changing geopolitical conditions and concerns about the US Federal Reserve's independence. This decline continues a trend since 2013, when China held about $1.3 trillion in Treasuries. However, official figures may understate China's true exposure, as analysts believe China also invests through custodial centers in countries like Belgium and Luxembourg. These indirect 'shadow holdings' suggest that, despite the reported drop, China's overall presence in the US debt market remains significant and strategically managed.