China's Stealth Buying of U.S. Treasuries Raises Concerns

China has been reducing its holdings of U.S. Treasury securities, with official data showing a decline from $1 trillion in April 2022 to $591 billion as of August 2026. However, analysts are skeptical of a wholesale dumping of U.S. assets, pointing to suspicious jumps in Treasury holdings elsewhere that coincide with the steep Chinese drop.

Canada's holdings of U.S. Treasuries have soared to $465 billion in August from $169 billion in the same month five years ago. Similarly, Belgium's stockpile has increased to $490.5 billion from $228 billion over the same span. These increases suggest that China may be using non-U.S. custodians to mask its true holdings.

China's economic growth in the third quarter of 2026 was driven by export-led growth, with integrated circuit exports alone jumping 136% to $45 billion. This surge in exports is largely due to global AI infrastructure spending, which has pushed buyers to pay up for Chinese products.

Asian markets have been falling on concerns over expensive artificial intelligence (AI) valuations and funding, which could weigh on Indian equities. Despite global headwinds, domestic benchmarks ended last week on a strong note, with the Sensex surging 3.11% and the Nifty advancing 2.78%.