In February 2024, China decreased its U.S. Treasury holdings by $22.7 billion, bringing its total to $775 billion. This move is part of a broader strategy to diversify foreign exchange reserves and reduce reliance on U.S. assets.
📉 Ongoing Reduction in U.S. Treasury Holdings
Since early 2021, China has reduced its U.S. Treasury holdings by approximately 25%, amounting to a $280 billion decrease. This trend reflects China’s efforts to mitigate exposure to U.S. financial instruments amid evolving economic and geopolitical landscapes.
💰 Shift Towards Gold Reserves
Concurrently, China has been increasing its gold reserves, adding over 300 tons since October 2022. This shift indicates a strategic move towards assets perceived as more stable and less susceptible to foreign policy influences. FX Leaders
🌐 Implications for Global Markets
China’s reduction in U.S. Treasury holdings and pivot to gold could influence global financial markets by affecting demand for U.S. debt securities and altering currency reserve compositions worldwide.
