If the pace accelerates materially…. China (together with Hong Kong) holds around $1.8tr of US securities, or only 5% of all foreign holdings. While China’s annual net sales have increased from $36bn in 2023 to $145bn in 2025, this has had a limited impact so far.
…but Europe matters more. Europe holds $17.1tr, or 47% of foreign holdings and has been a consistent net buyer, increasing annual net purchases from c.$0.6tr in both 2022 and 2023 to $0.8tr in 2024 and $0.9tr in 2025. These inflows have more than offset China’s gradual reductions, making European investor behaviour the key swing factor for US markets.
A further complication is the decline in transparency of ultimate investors: over the past four years, $0.3-0.8bn per year (up to 60% of net annual foreign inflows) has been attributable to international financial and custodial hubs from Europe (Belgium, Ireland, Luxembourg, Switzerland), Asia (Singapore), and the Caribbean. This complicates attribution and underscores that country‑level TIC flows can mask underlying investment sources.
