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China Drops to No. 3 Holder of Treasuries, Falling Behind UK
By Liz Capo McCormick
May 17, 2025 at 4:00 AM GMT+8
Updated on
May 17, 2025 at 4:15 AM GMT+8
China reduced its holdings of US Treasuries in March, with the UK surpassing it as the second-largest overseas owner.
Summary by Bloomberg AI
Total overseas holdings of US Treasuries rose to a record high of $9.05 trillion in March, with Japan, the UK, Canada, and Belgium among the countries increasing their holdings.
Summary by Bloomberg AI
Despite trade-war fears, foreign demand for US government securities remained strong in March, with no signs of a revolt against American government securities.
Summary by Bloomberg AI
China shrank its holdings of US Treasuries in March, with the UK replacing it as the No. 2 overseas owner.
The month, which preceded the April turmoil in the Treasuries market, saw a second straight jump in foreign purchases, to a fresh record high. Total overseas holdings rose $233.1 billion, to $9.05 trillion, Treasury Department figures showed Friday.
China was the top holder of Treasuries as recently as 2019, when Japan overtook it. The latest data show the UK surpassed China for the first time in more than two decades, according to data compiled by Bloomberg.
Foreign Holdings of US Treasuries
China was surpassed by Japan as the top foreign owner in 2019, and has now slipped behind the UK
Source: Treasury Department
More broadly, Friday’s release showed that, at least as of March, there was no revolt against American government securities. Foreign demand has been a point of discussion in the bond market since President Donald Trump mounted an aggressive tariff-hiking campaign and repeatedly accused US economic partners of having “ripped off” the nation. His April 2 “Liberation Day” levies stoked a selloff in Treasuries, the dollar and stocks at times during that month.
As for March, Japan, the UK, Canada and Belgium were among the countries whose Treasuries holdings rose. The UK, saw its stockpile rise to $779.3 billion, putting it above China’s $765.4 billion. The Chinese holdings reflected, in part, net sales of $27.6 billion of long-term Treasuries.
Japan, CanadaJapan’s holdings rose for a third straight month, to $1.13 trillion. Canada’s stockpile rose by $20.1 billion, to $426.2 billion, the data showed.
Belgium, whose holdings include Chinese custodial accounts according to market analysts, rose by $7.4 to $402.1 billion of Treasuries in March.
Holdings of the Cayman Islands — viewed as a popular domicile for leveraged investors such as hedge funds, — rose by $37.5 billion, to $455.3 billion.
The Bloomberg Dollar Spot Index dropped 1.8% in March, ahead of the near 4% slide the following month amid the volatility sparked by Trump’s tariff threats. Ten-year Treasury yields were little changed in March, before careening from as low as 3.86% to as high as 4.59% during the April turmoil.
Trade-war fears have diminished more recently, after a meeting of US and Chinese officials last weekend led to a lower set of levies between those nations. Earlier this month, the Trump adminstration announced a trade deal with the UK. |
