China Treasury fears resurface, but the data shows its grip on US debt is fading.

Amid renewed market chatter about China potentially selling U.S. Treasuries, it is worth grounding the discussion in current data. Concerns over foreign liquidation of U.S. government debt often resurface during periods of market volatility, but the scale of China’s holdings today is far smaller than commonly assumed.

According to the U.S. Treasury’s International Capital (TIC) data, China now holds less than 2% of total outstanding U.S. Treasury debt. This marks a significant decline from prior decades and suggests that shifts in China’s portfolio, while noteworthy, carry far less systemic weight than they once did. 

See the below chart outlining the percentage of U.S. debt held by China and other foreign nations:

Below is a current snapshot of the U.S. Treasury market, highlighting where yields are trading across key maturities:

• U.S. 2 Year Treasury yield (US2Y) is at 3.50%.
• U.S. 5 Year Treasury yield (US5Y) is at 3.77%.
• U.S. 10 Year Treasury yield (US10Y) is at 4.23%.
• U.S. 20 Year Treasury yield (US20Y) is at 4.82%.
• U.S. 30 Year Treasury yield (US30Y) is at 4.88%.

Source: MSN