China has cut investment in U.S. government debt to its lowest level since 2009

China reduced the portfolio of US Treasuries in December 2024 by $9.6 billion to $759 billion, the lowest level since 2009. This was reported on February 19 by the Financial Times (FT) newspaper with reference to the U.S. Treasury Department.

As indicated in the material, this change partly reflects China's desire to diversify its foreign exchange reserves, buying assets such as gold. At the same time, it is noted that Beijing is trying to hide the true size of its assets, transferring them to custodial accounts registered elsewhere.

The PRC is the second largest holder of US Treasuries in the world. Japan remains the leader, with its portfolio of investments in US government securities totaling $1.06 trillion at the end of December, down $27.3 billion in December and $55.5 billion year-to-date.

"Nevertheless, total Chinese holdings of US Treasuries will slowly decline, the trend is clear as China continues to diversify its reserve assets," said the FT newspaper's source.

U.S. government debt surpassed $36 trillion for the first time in November 2024. U.S. government debt is projected to rise to 118% of GDP in 2035 and continue to grow. Among the reasons for this trend will be that "the increase in mandatory spending and interest payments will exceed revenue growth," the material reports.

Earlier, on December 3, 2024, entrepreneur and head of the US Department of Government Efficiency (DOGE) Ilon Musk said that the US is rapidly approaching total bankruptcy due to the growing national debt.