China Dumps U.S. Treasuries as Global Holdings Hit Record High

As global demand for U.S. debt surges, China is heading in the opposite direction.

New data from the U.S. Treasury reveals that Beijing offloaded nearly $19 billion in U.S. government bonds between February and March, signaling a continued retreat from American assets.

While many foreign governments added to their Treasury portfolios, China trimmed its holdings to a multi-year low — part of a trend that analysts say has been unfolding since 2018. Meanwhile, the United Kingdom has overtaken China to become the second-largest foreign holder of U.S. Treasuries for the first time, trailing only Japan, which still tops the list with $1.13 trillion in holdings.

Notably, the Cayman Islands — despite a population of just 73,000 — now ranks fourth, with a massive $455 billion in U.S. debt, highlighting the role of offshore financial hubs in global capital flows.

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In total, foreign ownership of Treasuries reached a new high of $9.05 trillion in March. But macro strategist Luke Gromen warns that rising debt demand from abroad doesn’t solve deeper problems. He argues that countries loading up on Treasuries are unlikely to increase imports of U.S.-made goods at the same time, worsening America’s trade imbalance — a key issue former President Trump has vowed to address in a potential second term.

“How can these nations afford to buy both U.S. bonds and American exports?” Gromen asked, suggesting that Washington may soon face a tough choice between debt financing and trade rebalancing.

The decline in Chinese holdings adds another layer of complexity to ongoing geopolitical tensions and could signal a longer-term strategic shift in how global powers manage their reserves.

Alexander Stefanov

With over 8 years of experience in the cryptocurrency and blockchain industry, Alexander is a seasoned content creator and market analyst dedicated to making digital assets more accessible and understandable. He specializes in breaking down complex crypto trends, analyzing market movements, and producing insightful content aimed at educating both newcomers and seasoned investors. Alexander has built a reputation for delivering timely and accurate analysis, while keeping a close eye on regulatory developments, emerging technologies, and macroeconomic trends that shape the future of digital finance. His work is rooted in a passion for innovation and a firm belief that widespread education is key to accelerating global crypto adoption.