Reports this week about China and other countries backing away from US Treasuries have put the spotlight on international moves to ‘dedollarise’ and potential credit risks linked to US debt and the country’s political upheaval.
US President Donald Trump’s threats over the sovereignty of Greenland spurred debate in Europe on whether countries such as Denmark should leverage their holdings of US debt and equities, as noted by Fortune magazine.
Treasury Secretary Scott Bessent played such moves down, but on Monday news emerged that China had told local financial entities to limit their buying of US Treasuries, with those having a high exposure to the bonds advised to reduce their holdings because of concentration risks and market volatility, according to a report by Bloomberg, which cited unnamed sources.
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The advice did not apply to Chinese state holdings of US government bonds, analysts said, adding that the directive was issued to financial institutions before Chinese President Xi Jinping’s recent call with US President Donald Trump.
China is the third largest holder of US government bonds, with the mainland and Hong Kong holding a total of $938 billion as of November 2025. Japan holds nearly double that amount, while Britain also holds $888 billion worth of Treasuries.
Economists have also warned that Washington’s $38 trillion national debt poses a massive threat to the global financial perception of the US.
Senator Elizabeth Warren warned early this year that a decline in global demand for Treasuries would be a “huge deal” for the American economy, saying that would spur higher interest rates and significantly increase costs for consumers on mortgages and car loans.
But Fortune also noted that a trend was emerging from nations in the BRICS grouping – Brazil, Russia, India, China and South Africa – “selling off or rolling over” American debt.
“Brazil, for example, held $229 billion in American Treasuries in November 2024, and 12 months later, this had slipped to $168 billion. In India, November 2024 saw the nation holding $234 billion in Treasury holdings and by November 2025, this had reduced to $186.5 billion,” it said.
Other analysts, such as Innes McFee, CEO of Oxford Economics, have said investors still want to be exposed to the fast-growing US economy, “but we do want to hedge our exposure.”
- Jim Pollard
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