China now holds $618 billion of US government debt, the lowest figure in 18 years. The July reading, released in Treasury data on Wednesday, September 16, fell $15.4 billion from June. Chinese financial data provider Wind put it at the lowest since August 2008, when China held $573.7 billion.
Start with what the number does not say. Changes in foreign holdings reflect price moves as well as purchases and sales, and the Bloomberg US Treasury Index fell by more than 1% in July. So a drop in holdings cannot simply be read as an equal amount of selling.
A broader retreat
China was not alone. Total foreign holdings fell for a second straight month, down $50.4 billion from June to $9.25 trillion, the lowest since October 2025. France and Canada accounted for the biggest declines: France shed $41.5 billion to $348.4 billion, and Canada $33.3 billion to $426.3 billion. Analysts tied the retreat to worries that the Iran war would intensify inflation, on top of lingering concern about the US budget deficit and the sustainability of government finances.
Belgium’s reported holdings also dropped, to $470.7 billion. The catch is that market analysts say some of what is booked to Belgium is held in custody for China, so the Chinese figure may understate its true exposure.
Who bought, who sold
The UK went the other way, adding $58.4 billion to reach $998.3 billion and staying the second-largest foreign holder. China ranks third. Japan is still first, even after a $12.8 billion monthly decline took it to about $1.1 trillion.
Japan’s drop has its own explanation. Tokyo intervened in currency markets to support the yen in July, and Ministry of Finance data suggested the government probably sold some foreign securities to pay for it. Treasury Secretary Scott Bessent has said one possible reason Washington joined the yen-buying intervention on July 31 was to reduce Japan’s need to sell US assets.
