China Reduces US Treasury Holdings Amid Debt Concerns

China reduced its US Treasury holdings in October to US$688.7 billion, the lowest level in 17 years, down from US$700.5 billion in September, according to US Treasury Department data released on Thursday.

This figure marks the lowest reported since November 2008 and represents a decline of over 47 percent from the peak of nearly US$1.32 trillion reached in November 2013. As of March, China fell to third place among foreign Treasury holders, behind Japan and the United Kingdom.

This ongoing reduction reflects rising concerns over US debt sustainability, exacerbated by the passage of the One Big Beautiful Bill Act and concerns regarding the independence of the Federal Reserve, particularly as the White House advocates for lower interest rates.

Yu Yongding, a former adviser to China's central bank, has warned of increasing risks associated with US dollar assets.