Source: Fortune
Summary
China’s U.S. Treasury holdings have declined significantly, from $1 trillion in 2022 to $591 billion as of August 2026, according to U.S. data. However, the data may not reflect the full picture, as some holdings are held in overseas custodians. Analysts suggest that China may be shifting its Treasury debt to non-U.S. custodians, making it harder to track. Canada and Belgium have seen sharp increases in Treasury holdings, which some experts link to China’s portfolio adjustments. Despite the decline, China’s overall U.S. financial holdings remain substantial.
Our Reading
The numbers tell one story.
China’s Treasury holdings fell sharply but may not reflect the full picture.
Canada and Belgium saw big jumps in holdings, raising questions about ownership.
Experts suggest China is using non-U.S. custodians to mask its true holdings.
Official data may understate China’s actual exposure to U.S. debt.
Author: Evan Null
China’s Treasury Decline
China was once the top holder of U.S. Treasuries, but it has been reducing its holdings for years. Official data shows a significant drop, from $1 trillion in 2022 to $591 billion in August 2026. This decline has raised concerns about de-dollarization, but some experts believe the data may not capture the full extent of China’s portfolio.
Overseas Custodians
The U.S. data on Treasury holdings is collected from U.S.-based custodians and broker-dealers. However, the Treasury Department notes that overseas custody accounts may not be attributed to the actual owners. This has led to skepticism about whether China is truly selling off its holdings or just moving them.
Surprising Increases in Other Countries
While China’s holdings have fallen, other countries like Canada and Belgium have seen sharp increases. Canada’s holdings rose to $465 billion from $169 billion over five years, and Belgium’s jumped to $490.5 billion from $228 billion. These increases have raised questions about whether China is shifting its assets to other custodians.
Global Financial Shifts
China has been challenging the U.S. dollar’s dominance in global finance. U.S. sanctions on Russia and trade tensions with the U.S. have encouraged China to diversify its reserves. However, China still relies heavily on exports, and its trade surplus reached $1.2 trillion in 2025, the largest in history.
Uncertainty and Adjustments
Experts like Brad Setser suggest that China’s true Treasury holdings may be higher than official data indicates. He points to increased holdings in European and Canadian custodians, which may be masking China’s actual exposure. Adjustments to the data could reveal a more accurate picture of China’s financial position in the U.S.
