The amount of US Treasury bonds held by China has fallen to its lowest level

The trade war is escalating.

According to the latest Treasury International Capital (TIC) data released by the U.S. Treasury Department on February 9, 2026 , the amount of U.S. Treasury bonds officially held by China has fallen to its lowest level since May 2009.

As of November 2025 (the most recent reported month), China held $768.6 billion in U.S. Treasury bonds — down $9.8 billion from October and marking the lowest level since the 2008-2009 global financial crisis.

This continues a gradual but persistent downward trend in China's treasury bond portfolio that has lasted for many years, peaking at $1.317 trillion in November 2013.

Factors affecting China

The prolonged decline in reserves reflects a combination of strategic, economic, and geopolitical factors:

• De-dollarization and reserve diversification: China has actively reduced its reliance on USD-denominated assets since 2015-2016, increasing its allocation to gold, the euro, the yen, and domestic assets. Gold reserves have steadily increased (official figures are around 2,262 tonnes, although some analysts estimate undisclosed reserves to be higher).

• Trade surplus and capital flow management: China's trade surplus with the U.S. has decreased compared to pre-tariff levels, reducing the need for dollar reinvestment in Treasury bonds. Capital controls and restrictions on overseas investment have also slowed Treasury bond purchases.

• Geopolitical risks and sanctions: Ongoing US-China tensions (technology restrictions, tariffs, threats of sanctions) have heightened Beijing's concerns about the possibility of asset freezes – similar to what was imposed on Russia in 2022. Holding fewer assets denominated in USD that are more susceptible to seizure would reduce this vulnerability.

• Domestic economic priorities: China has redirected its foreign exchange reserves to support the yuan, finance Belt and Road projects, and stabilize domestic financial markets amid a struggling real estate sector.

Diversification without differentiation

Several factors are at play. First, there is geopolitical risk: escalating tensions between the U.S. and China have fueled concerns about sanctions, asset freezes, and the political leverage associated with dollar-denominated assets. Diversification of reserves, as China reallocated them toward gold, non-dollar currencies, and alternative assets to reduce reliance on a single issuer. Domestic priorities—such as stabilizing the yuan and managing capital flows—have necessitated more active use of reserves.

Despite the decline, this does not signal the end of the dollar's dominance. The US Treasury bond market remains the world's deepest and most liquid market. China's strategy appears to be risk mitigation rather than complete divestment—minimizing vulnerability while maintaining sufficient dollar liquidity for trade and financial stability.

Our review

The fact that China's Treasury bond reserves have hit their lowest level since the 2008 crisis is not a sudden event—but rather the continuation of a deliberate, years-long strategic shift. While the U.S. debt market remains deep and liquid enough to absorb this decline without major disruption, this trend reinforces the slow but persistent decline of China's role as the United States' largest foreign creditor.

For global investors, this is another data point that adds to the de-dollarization narrative — a narrative that continues to favor scarce, non-sovereign assets like gold and Bitcoin over time. The U.S. Treasury bond market remains the world's deepest and most liquid market… but it is no longer as essential to China as it once was.

Disclaimer: The information presented in this article is the author's personal opinion in the field of cryptocurrency. This is not financial or investment advice. All investment decisions should be based on careful consideration of your personal portfolio and risk tolerance. The views expressed in this article do not represent the official stance of the platform. We recommend that readers conduct their own research and consult with experts before making any investment decisions.

Compiled and analyzed by HCCVenture

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