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, raising concerns over future demand for American debt.
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. The total holdings have fallen to approximately $682.6 billion, the lowest level since 2008.
“As illustrated in these MacroMicro charts, China’s holdings of US Treasuries have continued to fall,” El-Erian noted in a post on X.
He emphasized that the decline is even more pronounced when viewed against the backdrop of a “steady issuance of new securities by the US government.”
As illustrated in these MacroMicro charts, China’s holdings of US Treasuries have continued to fall.
Given the steady issuance of new securities by the US government, China’s share of total UST holdings has dropped even more — to 7%, a quarter of the 28% peak reached 15 years… pic.twitter.com/vagpQgsxuy
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Based on the data from the Federal Reserve Bank of St. Louis, here are the percentage changes in 10-year Treasury yields as of Feb. 12, 2026. The current 10-year Treasury yield stands at 4.09%.
|
Lookback Period |
Historical Date |
Historical Yield On 10-Year Treasury |
Percentage Change |
Absolute Change |
|---|---|---|---|---|
|
5-Year |
Feb 12, 2021 |
1.20% |
+240.83% |
+2.89 pp |
|
10-Year |
Feb 12, 2016 |
1.74% |
+135.06% |
+2.35 pp |
|
15-Year |
Feb 11, 2011 |
3.64% |
+12.36% |
+0.45 pp |
Source: FRED
-
5-Year Change: The most dramatic increase, with yields more than tripling from historically low pandemic-era rates of 1.20% to 4.09%
-
10-Year Change: Also substantial growth of 135%, reflecting the long-term recovery from the ultra-low rate environment of 2016
-
15-Year Change: More modest increase of 12.36%, as the 2011 yield of 3.64% was already relatively closer to current levels
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, Beijing has reportedly advised its domestic banks to limit their exposure to Treasury securities, pivoting instead toward gold and other hard assets. China’s gold reserves have now risen for 15 consecutive months, reaching a record 2,308 tonnes.
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