Moving Away from the Dollar

For decades, China has maintained significant holdings of US Treasuries, once peaking at over $1.3 trillion. But in recent years, Beijing has been slowly unwinding this position. By Q1 2025, China held approximately $759 billion in US debt, reflecting a broader strategy of diversifying its reserves. In parallel, its gold holdings have risen sharply, reaching 2,292.31 tonnes, now accounting for 6.5% of its total official reserves.

This pivot is not merely a matter of portfolio balance. Gold is seen by Chinese policymakers as a strategic asset that offers insulation from geopolitical risks, especially US sanctions and financial coercion. The idea, echoed in a 2009 US Embassy cable released by WikiLeaks, is…