China's US Treasury Holdings Drop to 18-Year Low
China's holdings of US government bonds fell to their lowest level in 18 years in August, reaching $590.7 billion, according to data from the US Treasury Department.
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Data released by the US Treasury Department indicates that China's holdings of US government bonds in its reserves decreased by $27.3 billion in August compared to the previous month. This reduction brought China's US Treasury holdings down to $590.7 billion, marking the lowest level recorded since August 2008, when the amount stood at $573.7 billion.
China, which ranks as the third-largest holder of US debt in its reserves, was not alone in adjusting its portfolio. Japan, the largest holder of US debt, sold $35.6 billion in August, reducing its holdings to $1.07 trillion.
Despite these significant sales from China and Japan, the overall volume of US Treasuries held by foreign countries largely maintained its level due to substantial purchases by the United Kingdom. The UK, the second-largest holder, acquired $180 billion worth of US Treasuries in August, increasing its holdings to $1.01 trillion.
Total US government bond holdings by foreign countries rose from $9.25 trillion in July to $9.33 trillion in August. Other notable buyers included Belgium, which increased its holdings by $19.8 billion to $490.5 billion, and Canada, which added $38.3 billion to reach $464.6 billion.
These shifts occur amid growing concerns about the sustainability of Washington's escalating debt, which has led to increased costs for US Treasuries recently. In August, the country's total debt reached $40 trillion, and the yield on the 30-year government bond surpassed 5 percent.