China's Treasury holdings drop below $1tn to 12-year low

Rising U.S. rates and Russia sanctions add fuel to Beijing's push away from dollar

Data from the U.S. Treasury Department shows that China held $981 billion in Treasury securities at the end of May. © Reuters

IORI KAWATE and YUTA SAITO, Nikkei staff writers

July 20, 2022 00:59 JST

BEIJING/NEW YORK -- China's holdings of U.S. government debt have fallen below $1 trillion for the first time since 2010, with concerns about the risk of Russia-style sanctions possibly accelerating a long-term financial decoupling driven by political tensions.

The tally stood at $980.7 billion at the end of May, shrinking by $22.6 billion from April and dropping 9% over six straight months of declines, U.S. Treasury Department data released Monday shows.