China’s recent actions in the global financial market are raising eyebrows. In April 2025, the country slashed its holdings of US Treasury bonds by over $8 billion.
A Significant Drop
This sale leaves China with around $757.2 billion in US Treasuries—a level not seen since 2009. This puts them behind the UK in terms of foreign ownership of US debt, dropping them to third place after holding the second spot for over 17 years.
Shifting Strategies?
Experts believe this move is part of a larger shift in China’s financial strategy. They point to a simultaneous and significant increase in China’s gold reserves, a trend that has accelerated since 2022. One analyst notes that the share of US Treasuries in China’s total foreign exchange reserves has fallen by about 15 percentage points since 2016, while gold’s share has nearly doubled.
Dollar’s Weakening Role?
This shift comes as the US dollar has been weakening against other major currencies. The US dollar index (DXY) is down over 15% since 2022, fueling concerns about the dollar’s future as the world’s primary reserve currency. Some prominent figures, like Nassim Taleb, even suggest gold has already replaced the dollar in this role, citing the increase in global gold reserves and the way gold is increasingly used in international transactions.
