China’s U.S. Debt Dumping Sparks New Financial Fears

China, once the largest holder of U.S. Treasuries, has been reducing its stockpile for years, raising concerns about de-dollarization, though official data may not fully reflect its actual holdings.

China’s decline in U.S. Treasury holdings began in earnest around 2021. However, as recently as April 2022, China still held $1 trillion in these securities. U.S. data released Friday indicate this amount fell to $591 billion as of August, the lowest level in 18 years and down from $700 billion a year earlier.

The Treasury Department says it primarily collects data from U.S.-based custodians and broker-dealers. They note that U.S. securities held in overseas custody accounts may not accurately reflect the actual owners.

China watchers have long been skeptical about a massive sell-off of U.S. assets. They point to unusual increases in Treasury holdings elsewhere that coincide with the significant decline in Chinese holdings.

Canada’s foreign reserves surged to $465 billion in August, up from just $169 billion five years earlier. Similarly, Belgium’s stockpile increased to $490.5 billion from $228 billion over the same period.

Including other bonds backed by federal housing agencies reveals even more staggering numbers. China is challenging the U.S. for supremacy in global finance, aiming to replace the dollar as the world’s leading currency.

U.S. sanctions on Russia after its 2022 invasion of Ukraine prompted the People’s Bank of China and other central banks to shift their reserves from the dollar to alternative assets like gold.

President Donald Trump’s trade war, particularly against China, gave Beijing more reasons to sell Treasuries and move away from the U.S.

Recently, China has increasingly relied on export-led growth as domestic demand has stagnated, largely due to the ongoing property crash and lingering debt issues.

Despite ongoing tensions with the U.S. and other trade partners, China achieved a $1.2 trillion trade surplus in 2025, the largest in recorded history, growing three times faster than global goods trade. This year is expected to break that record.

In the first nine months of 2026, China’s trade surplus reached $938 billion, and there are growing expectations that it could exceed last year’s record. China needs to reinvest these significant surpluses, which may lead it to transfer its Treasury debt to non-U.S. banks abroad. As a result, this would not appear as “China” in official U.S. data.

A senior fellow at the Council on Foreign Relations and a former Treasury official remarked on X, referencing a Bloomberg story: “There is strong evidence that China uses a Canadian custodian for its agencies, evident from the significant increase in Canada’s holdings and the notable impact of the June survey.”

In May, he analyzed China’s holdings, noting a significant rise in U.S. Treasuries held by custodians in the UK, France, Luxembourg, and Belgium since 2020. Combined with holdings in Canada and European custodial centers, China’s total may reach $500 billion.

An analysis of Canada, Luxembourg, and France since 2022 estimates China’s holdings at around $300 billion. Although China has reduced its long-term Treasury investments and increased short-term bills, its total U.S. financial holdings still account for 50% to 55% of its reserve portfolio.

“Both the Treasury and Agency portfolios need to be updated to reflect the bonds China holds in Canada and Europe,” he said. “This adds uncertainty, as China seems to use multiple non-U.S. custodians to conceal its true holdings.”

The country known as the “Red Dragon” is China.

Revelation 12:3 And there appeared another wonder in heaven; and behold a great red dragon, having seven heads and ten horns, and seven crowns upon his heads.

Revelation 12:4 And his tail drew the third part of the stars of heaven, and did cast them to the earth: and the dragon stood before the woman which was ready to be delivered, for to devour her child as soon as it was born.

Revelation 12:5 And she brought forth a man child, who was to rule all nations with a rod of iron: and her child was caught up unto God, and to his throne.

Revelation 12:6 And the woman fled into the wilderness, where she hath a place prepared of God, that they should feed her there a thousand two hundred and threescore days.

Revelation 12:7And there was war in heaven: Michael and his angels fought against the dragon; and the dragon fought and his angels,

Revelation 12:8 And prevailed not; neither was their place found any more in heaven.

Revelation 12:9 And the great dragon was cast out, that old serpent, called the Devil, and Satan, which deceiveth the whole world: he was cast out into the earth, and his angels were cast out with him.

Revelation 13:1 And I stood upon the sand of the sea, and saw a beast rise up out of the sea, having seven heads and ten horns, and upon his horns ten crowns, and upon his heads the name of blasphemy.

1 John 2:22 Who is a liar but he that denieth that Jesus is the Christ? He is an antichrist, that denieth the Father and the Son.

John 8:44 Ye are of your father the devil, and the lusts of your father ye will do. He was a murderer from the beginning, and abode not in the truth, because there is no truth in him. When he speaketh a lie, he speaketh of his own: for he is a liar, and the father of it.

2 Corinthians 4:4 In whom the god of this world hath blinded the minds of them which believe not, lest the light of the glorious gospel of Christ, who is the image of God, should shine unto them.

John 3:19 And this is the condemnation, that light is come into the world, and men loved darkness rather than light, because their deeds were evil.

John 3:20 For every one that doeth evil hateth the light, neither cometh to the light, lest his deeds should be reproved.

1 Timothy 6:5 Perverse disputings of men of corrupt minds, and destitute of the truth, supposing that gain is godliness: from such withdraw thyself.

1 Timothy 6:6 But godliness with contentment is great gain.

1 Timothy 6:7 For we brought nothing into this world, and it is certain we can carry nothing out.

1 Timothy 6:8 And having food and raiment let us be therewith content.

1 Timothy 6:9 But they that will be rich fall into temptation and a snare, and into many foolish and hurtful lusts, which drown men in destruction and perdition.

1 Timothy 6:10 For the love of money is the root of all evil: which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows.

John 3:19 And this is the condemnation, that light is come into the world, and men loved darkness rather than light, because their deeds were evil.

John 3:20 For every one that doeth evil hateth the light, neither cometh to the light, lest his deeds should be reproved.

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