China's US Treasury Share Hits 15-Year Low, Raising Concerns

Renowned economist Mohamed El-Erian warns of structural shift as China reduces its holdings to just 7% of the total market.

Published on Feb. 16, 2026

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Renowned economist Mohamed El-Erian has signaled a major structural shift in global finance as China's share of the U.S. Treasury market plummeted to a 15-year low of just 7%, down from a peak of 28% 15 years ago. The total holdings have fallen to approximately $682.6 billion, the lowest level since 2008. El-Erian emphasized that the decline is even more pronounced when viewed against the backdrop of steady issuance of new securities by the U.S. government.

Why it matters

The retreat coincides with a broader Chinese strategy to reduce reliance on the U.S. dollar amid heightening geopolitical tensions. As the U.S. national debt approaches $39 trillion, the loss of China's massive buying power could lead to higher borrowing costs for the U.S. government, threatening the delicate equilibrium of the global financial system.

The details

Data shared by El-Erian reveals that China's holdings of U.S. Treasuries now represent just 7% of the total market share, a staggering drop from the 28% peak recorded 15 years ago. This de-risking is a direct response to the weaponization of the dollar, following the 2022 freezing of Russian assets. By cutting its stake to 'a quarter of the 28% peak,' China is signaling a permanent shift away from being the primary financier of American deficits.

  • China's holdings of U.S. Treasuries have fallen to the lowest level since 2008.
  • China's gold reserves have now risen for 15 consecutive months, reaching a record 2,308 tonnes.

The players

Mohamed El-Erian

A renowned economist who has signaled a major structural shift in global finance as China's share of the U.S. Treasury market plummeted.

China

The country that has reduced its holdings of U.S. Treasuries to just 7% of the total market share, down from a peak of 28% 15 years ago.

U.S. government

The issuer of new securities, which has seen a steady increase in the face of declining Chinese demand for U.S. Treasuries.

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What they’re saying

“As illustrated in these MacroMicro charts, China's holdings of US Treasuries have continued to fall.”

— Mohamed El-Erian (X)

“China's move will mainly prompt the Federal Reserve to buy the bonds, creating inflationary conditions for consumers.”

— Peter Schiff, Economist (Benzinga)

What’s next

As the U.S. national debt approaches $39 trillion, it remains to be seen how the U.S. government will address the loss of China's massive buying power for its debt.

The takeaway

The retreat of China from the U.S. Treasury market signals a broader shift in global finance, as Beijing seeks to reduce its reliance on the U.S. dollar amid heightening geopolitical tensions. This move could have significant implications for the U.S. economy and the global financial system.