By Lance Roberts
Real Investment Advice, Houston
Monday, February 23, 2026
"China is dumping U.S. Treasuries to get out of the dollar." This claim has been circulating the mainstream feeds lately, with the narrative that the "end of the dollar is near," or "the U.S. will lose its funding base" and the "bond yields will surge."
But are those claims valid? Such is what we will explore in more detail.
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Let's start with the chart that has everyone concerned. As shown, China's holdings of U.S. Treasury bonds have fallen from nearly $1.2 trillion to $600 billion, or a 50% decline. On the surface, you can certainly understand the reasons for concern, as the decline in holdings over the last decade supports a clean storyline.
However, the problem is the step between observation and conclusion. A lower line item for "China, Mainland" does not equal a forced sale, it does not prove intent, nor does it prove a structural exit. What it does show is a lack of understanding about the dynamics of reserve currency management, and, in the case of China, the need to protect those reserves.
Let's start with the Treasury Department, which states that the holdings tables are built "primarily on the basis of custodial data." That phrase matters. Custodial data records where securities are held for settlement and safekeeping. Critically, the custodian is not the same as the beneficial owner, and that distinction undermines the headline narrative. ...
... For the remainder of the analysis:
https://realinvestmentadvice.com/resources/blog/is-china-really-dumping-us-treasuries/ [4]
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