China’s Strategic Shift: US Treasury Holdings Hit 17-Year Low
Recent reports confirm that China continues to reduce its holdings of US Treasuries, reaching levels not seen since 2008. Despite a tweet suggesting a sudden directive from Beijing, no official sources or credible news outlets have verified such an order. Instead, this reduction appears to be part of a long-term strategy to diversify China’s foreign reserves.
Current Holdings and Trends
As of November 2025, China’s US Treasury holdings have decreased to approximately $682.6 billion, down from $688.7 billion in October. This marks the lowest level since September 2008, according to data from the US Treasury Department and reported by Prism News. The reduction aligns with China’s broader strategy to mitigate risks associated with dollar-denominated assets.
Gold Accumulation and Reserve Diversification
In parallel with reducing US Treasury holdings, China has been increasing its gold reserves, which reached 74.15 million ounces by the end of December 2025. This marks the 14th consecutive month of gold accumulation, as reported by Global Times. This move is part of China’s effort to diversify its reserves and reduce dependence on the US dollar, reflecting a strategic pivot towards assets perceived as more stable amidst global economic uncertainties.
Market Implications and Expert Analysis
Analysts view China’s gradual reduction in US Treasuries as a calculated move to avoid market disruptions. Sudden large-scale sell-offs could depreciate the value of remaining holdings and destabilize financial markets. Experts from Financial Times describe this approach as ‘agile tightrope walking,’ balancing the need for diversification with market stability.
The strategic shift also reflects geopolitical considerations, as China seeks to minimize exposure to potential US economic policies that could impact its holdings. By increasing its gold reserves and diversifying into other overseas assets, China is hedging against currency and geopolitical risks.
Conclusion
While the tweet suggesting a sudden directive lacks substantiation, the ongoing trend of reducing US Treasury holdings is clear. China’s strategy appears to be a measured response to the evolving global economic landscape, prioritizing reserve diversification and risk management. As China continues to navigate these changes, the global markets will be closely monitoring the implications for US Treasuries and the broader economic environment.
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