The Dollar Era Fades from China’s Economic Landscape

Amid escalating trade tensions between the United States and China, Beijing has begun scaling back its investments in U.S. Treasury bonds, redirecting its focus toward European debt instruments.
According to Deutsche Bank, many Chinese investors have reduced their exposure to the U.S. dollar within their portfolios, showing increased interest in European and Japanese markets, as well as gold, as potential alternatives

A sign of the end of the dollar era?

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These moves come at a time when dollar-denominated assets have seen sharp declines in recent weeks, as doubts grow over their status as safe havens—especially following President Trump’s imposition of sweeping tariffs, which were later partially suspended for 90 days

At the same time, China’s holdings of U.S. Treasuries have fallen to their lowest level since 2009, reaching $759 billion in 2024—down $57 billion from the previous year.
This drop is partly attributed to China’s broader strategy of diversifying its foreign reserves into assets like gold, and utilizing custodial accounts in other countries to obscure the true extent of its U.S. bond holdings

These developments reflect a strategic shift in China’s investment policies, as the country moves to reduce its reliance on the U.S. dollar and diversify its reserves amid rising geopolitical tensions