Signal China sharply cut its US Treasury holdings while diversifying reserves

Summary

The People's Bank of China has pursued reserve diversification for more than a decade and, with depreciation pressure on the yuan over the past three years, has sold US Treasuries first when intervening to stabilise exchange rates. China's Treasury holdings fell from 1.181 trillion dollars at the end of 2018 to 731.4 billion dollars at the end of June 2025. Over the same period, Treasuries dropped from 36.4 percent to 20.5 percent of China's foreign reserves. China's share of all foreign-held Treasuries slid from 20.2 percent to 8.8 percent. The dollar's share of the central bank's reserves fell from 65 percent in 2010 to around 52 percent in 2024, while the shares of the euro and of gold and other currencies rose.