Brief
Analysts suspect China is masking US Treasury holdings in Canada
US Treasury data show a surge in Canadian holdings of US debt while China's reported holdings have halved, prompting speculation of a hidden transfer.
By Felo News Desk · Published
Wall Street analysts suspect that China is quietly moving billions of dollars of U.S. Treasury and mortgage‑backed securities to Canadian banks, a shift that would make the holdings appear as Canadian rather than Chinese in official Treasury data, according to a New York Post report dated Oct. 15, 2026.
What happened
U.S. Treasury data indicate that Canada’s reported holdings of U.S. government debt and federally backed mortgage bonds have risen to nearly $600 billion, more than four times the level five years earlier. In the same period, China’s reported Treasury holdings have fallen by roughly 50 % since 2016, now standing at about $618 billion.
What the reports add
The report notes that Bloomberg highlighted the jump in Canadian holdings, while Reuters is cited for noting that Treasury data can show the country of record without revealing the ultimate owner. Analysts argue that a transfer to Canadian banks would let Beijing keep the assets while making its exposure look smaller.
What was said
Brad Setser, a former U.S. Treasury official who tracks international capital flows, told Bloomberg, "The story here is that China has been much better at hiding its dollars than it’s been about getting out of the dollar." Vitaliy Liberman, a mortgage‑debt specialist at DoubleLine, told Bloomberg that Wall Street contacts pointed to China as a possible explanation for Canada’s surge in mortgage‑backed securities.
How it came about
China has long been one of the United States’ largest foreign creditors, using export earnings to buy Treasury bonds. The alleged shift to Canadian banks would allow Beijing to reduce the visible size of its U.S. debt portfolio without actually selling the securities, a tactic that could help it appear less dependent on the dollar while retaining the investment.
Key facts
- Canada’s reported holdings of U.S. Treasury and mortgage‑backed securities have risen to nearly $600 billion. (nypost.com)
- China’s reported Treasury holdings have fallen to about $618 billion, roughly half of their 2016 level. (nypost.com)
- Analysts suggest the increase may reflect Chinese bonds being held by Canadian banks, masking the true owner. (nypost.com)
- Brad Setser said China is better at hiding its dollars than exiting the dollar. (nypost.com)
- Vitaliy Liberman linked the surge in Canadian mortgage‑backed securities to possible Chinese ownership. (nypost.com)
Sources
- [1] nypost.com — originally reported as “China may be secretly stashing US debt holdings in Canada, Wall Street analysts suspect”
