China has reduced its U.S. Treasury holdings to a 17-year low as part of the continued diversification of its forex reserves towards gold and overseas equity investments amid unsettling ties with Washington. Japan’s holdings rose by $2.6 billion to $1.2 trillion, while the UK’s pool rose by $10.6 billion to $888.5 billion. China holds the world’s largest forex reserves totalling $3.3579 trillion at the end of December 2025, according to the official media reports in Beijing. “The massive accumulation of debt resembles a Ponzi scheme, where larger volumes of new debt are used to replace the old. While slashing its U.S. debt holdings, China is diversifying its forex assets more to increase its gold reserves.

Source: The Hindu January 17, 2026 13:22 UTC