China's reported U.S. Treasury holdings declined year-over-year, but custody data suggest possible reallocation to third-country custodians

China's reported holdings of U.S. Treasury securities fell to $590.7 billion in August 2026 from $699.7 billion a year earlier, according to U.S. Treasury data. However, holdings attributed to Belgium and Canada rose over the same period, and a former Treasury official indicated that some of China's bonds may be held through non-U.S. custodians, potentially masking the true ownership.

Why it matters. The shift affects how foreign ownership of U.S. debt is measured and interpreted, with implications for assessing de-dollarization trends and the transparency of global capital flows.