China cuts Treasuries to an 18-year low and buys gold for a 23rd month as its stocks enter a bear market

China held $590.7 billion of US Treasuries at the end of August, down $27.3 billion from $618.0 billion in July and $109 billion below the $699.7 billion it held a year earlier, according to the Treasury Department's TIC Table 5, published Oct. 19. The South China Morning Post, citing Wind data, calls it the lowest in about 18 years. In the same stretch, the People's Bank of China added gold for a 23rd straight month and mainland stocks slid into a bear market.

Three separate moves point the same way: less dollar debt, more bullion, and a weak home equity market. The data supports the direction. It does not support the most dramatic version circulating online.

The Treasury numbers

China's Treasury holdings	$ billion
August 2025	699.7
February 2026	694.2
March 2026	653.3
June 2026	633.4
July 2026	618.0
August 2026	590.7

Since February, holdings are down $103.5 billion, or about 15%. August's $27.3 billion drop (4.4% of the position) was the second-largest monthly fall of the past year. The largest was March, when holdings fell $40.9 billion, from $694.2 billion to $653.3 billion. So this is a steady retreat over half a year, not a single August event.

Treasury attaches a caveat that matters. The figures come mainly from US custodians and brokers, and securities held in overseas custody accounts "may not be attributed to the actual owners." Belgium ($490.5 billion) and Luxembourg ($448.2 billion) both hold far more than their economies would explain, and part of that can be Chinese-owned paper held through custodians. A fall in the China line can overstate a real fall in Chinese ownership. Hong Kong's holdings rose to $261.5 billion in August from $258.3 billion in July.

What the viral posts get wrong

• "China dumped $75 billion." The TIC data shows a $27.3 billion monthly decline. We could not find $75 billion in any month of the table.
• "Biggest sale since 2008." The level is the lowest in about 18 years. The monthly drop is not the biggest recent one: March 2026 was larger ($40.9 billion).
• "China's gold is worth $310 billion." Reports of the PBOC's reserve table put the value at about $323.5 billion at end-September, down from about $350.1 billion in August because gold prices fell.

Gold: a 23rd month of buying

The PBOC's reserves reached 77.47 million troy ounces (about 2,410 tonnes) at the end of September, a record, up about 740,000 ounces (roughly 23 tonnes) from August, per reports on the official reserve table. Business Today called it the largest monthly purchase since September 2023. Other outlets differ on the exact comparison, so we are not ranking it more precisely than that. Buying rose each month from March, according to the same report, and the 2026 total stands near 103 tonnes.

The timing is notable. China bought while gold fell more than 6% in September, which cut the value of its stockpile even as the tonnage grew. Gold was trading near $4,036 an ounce Thursday afternoon, down about 2.5% on the day, per our market widgets. Gold now equals roughly 55% of China's reported Treasury holdings by value ($323.5 billion against $590.7 billion).

Hong Kong is building the plumbing. The city's government said its gold central clearing and settlement system began trial operation on July 7, with a "Delivery Connect" link to the Shanghai Gold Exchange and a new HAU reference price built with Bloomberg. It targets vault capacity above 2,000 tonnes within three years.

The stock market backdrop

The CSI 300 is down 20% from its June peak after 10 straight weekly losses, as we reported earlier: China's CSI 300 falls into a bear market. Weak profits and consumer demand are the reasons analysts give. No source we read links the stock slide to the reserve moves, and we are not claiming a link.

What it means for yields, gold and the dollar

Treasury yields. China's $27.3 billion August drop is about 0.3% of the $9.33 trillion foreigners hold. Total foreign holdings actually rose $83 billion in August, because the UK, Canada and others bought. Foreign official holdings fell a smaller $17.5 billion to $3.756 trillion. A reduction this size cannot by itself move the market, but yields are already elevated: the 10-year was 5.13% on Oct. 21, up from 4.96% a month earlier, per Treasury's daily curve. A buyer stepping back matters more when auctions are already weak, and we have noted thin demand at recent auctions.

Gold. Central-bank buying is a floor under demand, but it has not held the price up this month. Gold is down sharply from its January record while Treasury yields have climbed, and our cost-of-holding analysis covers that tension.

The dollar. The dollar index was near 101.3 on Thursday, slightly lower on the day. Reserve diversification is a slow, multi-year story. It shows up in the shares of reserves held in dollars, not in one month's index move.

What to watch

• The September TIC report, due in the coming weeks, for whether China's line keeps falling and whether Belgium and Luxembourg keep rising.
• The PBOC's October reserve table in early November, for a 24th month of gold buying.
• Whether Beijing responds to the stock slide with stimulus.

Sources: US Treasury TIC Table 5 (Aug. 2026 data, released Oct. 19); South China Morning Post; Business Today on PBOC gold; Hong Kong government; Treasury daily yield curve; CNBC and Bloomberg via our CSI 300 report. Market prices as of about 2:35 PM ET Oct. 22. This is market information, not investment advice.