China’s reported U.S. Treasury holdings are down $109 billion over the past year.
But look at the whole picture, and total foreign holdings actually rose to $9.33 trillion in August.
Foreigners as a group own slightly more Treasury debt than a year ago, even as the biggest names cut back.
Total foreign holdings rose 0.9% over the year. The top ten alone hold about $5.5 trillion, roughly 60% of the foreign total.
Who’s buying and who’s selling
Working backward from the percentage changes, China’s holdings were roughly $700 billion a year ago and Japan’s about $1.18 trillion.
That means Japan’s holdings fell by about $115 billion, similar to China’s drop.
The UK went the other way, adding about $108 billion. Since the total still rose, buyers elsewhere more than made up the difference.
The headline can be misleading
The Treasury cautions that this data can’t attribute holdings to countries with full accuracy.
Foreign bonds are often held through custodians in places like Belgium, Luxembourg, the Cayman Islands and Ireland.
Bottom line
China’s Treasury holdings keep shrinking, but the world as a whole isn’t walking away from U.S. debt.
Foreign holdings are at a record $9.33 trillion, and new buyers have stepped in.
The thing to watch is whether that demand holds up at today’s yields, especially with the Treasury supplying more debt than ever.