China Reduces US Treasury Holdings Amid Debt Concerns

China has reduced its US Treasury holdings in October to US$688.7 billion, the lowest level since November 2008, down from US$700.5 billion in September, according to data from the US Treasury Department.

This represents a decline of more than 47 percent from the peak of nearly US$1.32 trillion reached in November 2013, as reported by Chinese financial data provider Wind. The reduction in holdings comes amid growing concerns regarding US debt sustainability, particularly following the passage of the One Big Beautiful Bill Act, and unease over the independence of the Federal Reserve as the White House advocates for lower interest rates.

Furthermore, China has slipped to third place among foreign Treasury holders, trailing Japan and the United Kingdom, a trend that began during President Donald Trump's first term and has continued into this year.

In a recent article, Yu Yongding, a former adviser to China's central bank, highlighted the escalating risks associated with US dollar assets.