According to the latest November data released by the U.S. Department of the Treasury, the total foreign holdings of U.S. debt reached $9.36 trillion, hitting a record high. But behind this number, there is an interesting story.

First, let's look at the rankings by country. China decreased its holdings by $6.1 billion in November, down to $682.6 billion, being surpassed by the UK by $200 billion and falling to third place. Within this total of $9.36 trillion, the changes in holdings by these national institutions actually reflect a deeper shift in attitude.

A numerical comparison can illustrate the issue well. Foreign holdings increased from $6.17 trillion in 2015 to $9.36 trillion in 2025, a growth of about 51%. Meanwhile, the total amount of U.S. debt surged from $18.15 trillion to over $38 trillion, more than doubling. In other words, although foreign holdings are increasing, their proportion is actually decreasing. It’s like the cake has grown larger, but your slice has become relatively smaller.

More noteworthy is the structural change. The proportion of foreign debt held by official institutions such as central banks has fallen from 80% to less than 50%, a decline of over half. This retreat of large official funds indicates a significant shift—they are not avoiding U.S. debt altogether, but reallocating assets. Many official institutions are turning to alternative assets like gold, and now official holdings account for only 16% of foreign U.S. debt holdings.

Why are non-official institutions still increasing their holdings? The logic is actually simple. Some international financial institutions, corporations, and investment funds are more sensitive to yields, and short-term U.S. debt interest remains attractive. They hold a lot of idle dollars and investing in U.S. debt can provide stable returns. The UK’s financial institutions are a typical example—dense with professional wealth management firms, and such short-term considerations have boosted the UK’s ranking in U.S. debt holdings.

But the logic for large official funds is completely different. Once investments reach hundreds of billions or even trillions, asset allocation decisions must consider long-term risks and liquidity. Official institutions not only look at returns but also evaluate asset safety and geopolitical risks. The significant decline in debt holdings proportion indicates that these decision-makers are cautiously adjusting their strategies rather than following the trend.

In short, although the total size of U.S. debt is at a new high and foreign investment is increasing, this is more of a market-driven behavior—since the dollar remains the main international reserve currency and U.S. debt is still the largest fixed-income market. However, the underlying capital structure is quietly shifting, and official institutions are becoming more cautious.