China Massive US Treasury Selloff

Investment Analysis Clubs Macro Economic Trends and Risks
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China’s share of all foreign US Treasury holdings has fallen to 7.3%, which is the lowest level since 2001. This share was much higher before — it was 28.8% in June 2011, meaning it has dropped by about 21.5 percentage points since then. In money terms, China’s US Treasury holdings have fallen by about $627 billion over this period.

At the same time, China has been buying gold regularly instead of bonds.

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I have watched this for years. It was always in the 8 to 9% range.

Who is the Economic Times?

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It is a so so source.

Interesting AI can be honest? If AI slanders you who do you sue?

Who publishes the Economic Times are they honest

The Economic Times
(ET) is published by Bennett, Coleman & Co. Ltd. (BCCL), which is the flagship company of The Times Group. Based in Mumbai, it is the world’s second-most widely read English-language business newspaper, trailing only The Wall Street Journal.

[image]Wikipedia +1

Ownership and Background

  • Owner: The Times Group, which is primarily controlled by the Sahu Jain family.
  • Key Figures: As of 2026, the group is managed by brothers Samir Jain (Vice-Chairman) and Vineet Jain (Managing Director).
  • Format: It is a daily broadsheet printed on signature salmon-pink paper.
  • Language: While its primary publication is in English, it also has digital editions in several Indian languages including Hindi, Gujarati, Marathi, and Bengali.

[image]Wikipedia +3

Assessment of Reliability and Integrity

The publication’s “honesty” or reliability is a subject of mixed reviews, with its reputation varying significantly between institutional ratings and public perception:

  • Institutional Trust: Some analysis groups place ET in a “Low Trust Tier,” citing a need for greater transparency in testing practices and methodological consistency. It has been noted that the publication generates revenue through sponsored content and undisclosed affiliate partnerships.
  • Journalistic Criticisms: ET has faced specific allegations of “sloppy journalism” and factual inaccuracies in the past. For example, Global Financial Integrity (GFI) once denounced an ET article for taking quotes out of context and containing “factual errors”.
  • Market Position: Despite criticisms, it remains a premier source for Indian business professionals and investors due to its extensive coverage of the Indian economy, international finance, and share prices.
  • Comparison to Alternatives: Within the Indian market, some readers prefer competitors like Business Standard or Mint for what they perceive as more in-depth, “pure” economic analysis compared to ET’s broad-interest approach.

[image]Global Financial Integrity +5

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Hmm. In the 10 years between 2001 and 2011 the percentage went from 7% up to 29%. Then over the next 15 years it went back to 7%.

At the same time, Federal debt held by foreigners has increased from $1.0 trillion in 2001 to $9.2 trillion so that 7% held by China is nine times larger than it was in 2001.

DB2

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Bob,

The reporter is a purposely sloppy idiot. He is playing to his audience.

AI Overview

Yes, based on data from 2011,

Chinese entities held roughly 8% to 10% of total U.S. Treasury securities, making them the largest foreign holder at that time.

[image]Business Insider

Here are the key details regarding China’s U.S. debt holdings in 2011:

  • Total Ownership Percentage: In mid-2011, reports indicated that Chinese entities held roughly 8% to 9.5% of all outstanding U.S. Treasury paper.
  • Share of Foreign Holdings: While they held nearly 10% of the total debt, they held a much higher share of foreign-owned debt, accounting for roughly 24% to 28% of all U.S. debt held by foreign investors in 2011.
  • Dollar Amount: By the end of 2011, China’s official direct holdings of U.S. Treasuries were estimated at over $1.1 trillion.
  • Context: While often cited as the largest creditor, the majority of U.S. debt is held domestically (by the Federal Reserve, U.S. households, and government entities), not by foreign countries.

[image]Business Insider +4

While some 2011, analysis estimated their holding of total debt closer to 9–10%, the percentage of foreign-held debt was significantly higher, notes one analysis.

[image]ScholarWorks @ UTRGV +2

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Data shared by El-Erian reveals that China’s holdings of U.S. Treasuries now represent just 7% of the total market share—a staggering drop from the 28% peak recorded 15 years ago. The total holdings have fallen to approximately $682.6 billion, the lowest level since 2008.

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Why is this an alarm?

If US trade deficit with China declines, so should Chinese investment in US assets.

Right?

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It is not even factual.

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It’s an alarm on many levels. For economists it’s a sign from a sophisticated investor that “things have changed.” Between 2001 and 2010 China was playing the part of “responsible growing country” and playing nice, trying not to disrupt the world (or specific country) economies, and being “a good citizen”.

Assuming the numbers are true (and I see dispute in the thread) I would say they got to a point of “size risk” and decided to dial back, the same way Berkshire did when it disgorged 2/3 of its Apple stake - not because anything was wrong, just the “too many eggs in one basket” theory.

Lately I have a more sinister take, that 1) they don’t trust the whims of our current leadership (and I wouldn’t blame them) or 2) they are planning ahead for the day when they do something they know we won’t like (*Taiwan, anyone?) and don’t want so many assets stranded by executive fiat - as they have seen before.

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Ok, but what is the specific risk?

I’m not saying there isn’t one, but what is it?

For example, is it lower China demand means higher yields and more interest cost for US taxpayers to service Fed debt? (US Treasury rates aren’t high, are they higher in a material way? and can we attribute any change in yields to China per se?)

Or something else?

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He decides to default on our debt.

Not his first bankruptcy.

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No wonder gold prices are trending upward. China is a major buyer.

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@pauleckler

The group with by far the biggest spending on gold US venture capital and ETFs.

The central banks are minor in comparison.

The financials might be doubling up contracts on the underlying gold.

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The risk is US is producing $2 T annual deficit. When you lose a significant rate insensitive buyer, the remaining buyers will demand higher rates.

Now, US Fed can step in to mitigate some of that, a la japan. But, we have a Fed Chair who believes we need to shrink fed balance sheet even further.

So, if 10 year goes to 6% the impact will ripple through entire society from federal budget to your kitchen budget.

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