China continued its strategic reserve shift in September as its US Treasury holdings declined slightly. New data from the US Treasury Department showed China holding $700.5 billion in Treasuries, compared with $701 billion in August. Although the change appeared small, analysts said the reduction reflected a broader long-term adjustment.
China advanced its strategic reserve shift over the past decade as global monetary conditions evolved. Officials steadily reduced exposure to US debt and diversified reserve assets to strengthen resilience. Moreover, ongoing market uncertainty encouraged China to rely more heavily on alternative stores of value, including gold.
The September release followed a delay caused by the US government’s 43-day shutdown. Despite the postponement, global markets watched the figures closely because they signal confidence levels among major holders. China marked its fifth monthly reduction this year and kept holdings near their lowest point since 2008.
China also continued expanding gold holdings throughout the year as part of its long-term diversification strategy. The State Administration of Foreign Exchange reported reserves reaching 74.06 million ounces in September. Officials said the increase aligned with efforts to stabilize national reserves and mitigate external risks.
Chinese economist Xi Junyang said several economic factors supported this strategic reserve shift. He noted that many countries increasingly preferred settling trade in their own currencies to reduce dependence on the dollar. He added that persistent US inflation and a softer dollar prompted more nations to reconsider their reserve allocations.
Global demand for US Treasuries also edged lower in September, revealing caution across major markets. Japan held $1.189 trillion and maintained its position as the largest foreign holder. However, the United Kingdom cut its holdings significantly from the previous month, highlighting broader financial uncertainty.
China’s overall foreign exchange reserves still rose slightly to $3.3387 trillion in September. Officials credited the increase to steady economic momentum and continued improvements in domestic fundamentals. They said stable reserves would help maintain confidence in China’s long-term economic position.
Analysts expect China to continue adjusting its reserve portfolio as geopolitical pressures persist and global markets shift. Therefore, additional diversification may follow if commodity prices remain stable and new investment channels expand. Overall, China’s strategy aims to strengthen financial security through a measured and forward-looking strategic reserve shift.
