China's Holdings of U.S. Treasuries Fall to 17-Year Low

$68.26 Billion in November
Asset Diversification Accelerates as Gold Purchases Expand

China's holdings of U.S. Treasury bonds have fallen to their lowest level in about 17 years, reaching levels last seen in the aftermath of the 2008 financial crisis.

According to data released by the U.S. Department of State on January 16 (local time), as of November last year, China's holdings of U.S. Treasuries stood at $682.6 billion (approximately 1,007 trillion won), a decrease of $6.1 billion from the previous month. This is the lowest level since September 2008, when the figure was $618.2 billion.

Compared to the end of January last year, shortly after Donald Trump took office as U.S. President, when the holdings were $760.8 billion, this represents a 10.2% decrease. China has steadily reduced its share of U.S. Treasuries in recent years, and in March last year, it fell to third place in terms of holdings, overtaken by the United Kingdom.

Market analysts point to several factors stimulating China's asset diversification strategy: the rapid increase in U.S. national debt, debates over the independence of the Federal Reserve, and weakening confidence in dollar-denominated assets.

Instead, China has been actively purchasing gold. China's gold reserves increased for 14 consecutive months as of last month, rising by 30,000 ounces from the previous month to 74.15 million ounces at the end of last month.

In contrast, total foreign holdings of U.S. Treasuries have increased. According to foreign media reports, as of November last year, foreign holdings reached a record high of $9.3554 trillion. Major holders, including Japan (first), the United Kingdom (second), Belgium (fourth), and Canada (fifth), all increased their U.S. Treasury purchases compared to the previous month.