China has reduced its U.S. Treasury holdings from $1 trillion in April 2022 to $591 billion in August 2024, the lowest in 18 years. However, U.S. data may not fully capture Beijing’s actual portfolio as it relies on U.S.-based custodians. Canada’s holdings have surged to $465 billion and Belgium’s to $490.5 billion, suggesting China is concealing part of its purchases behind custodial accounts in these countries. China posted a record trade surplus of $1.2 trillion in 2025 and $938 billion in the first nine months of 2026, funds that must be recycled somewhere. Brad Setser, an expert at the Council on Foreign Relations, estimates China’s actual U.S. debt holdings between $300 billion and $500 billion, contradicting the assumption of a massive dumping of dollar assets.
Source: Read the original article
