The most recent data on investments in dollar denominated assets from the U.S. Treasury International Capital (TIC) department of the Ministry of Finance for November 2024 reveal critical shifts in global capital flows, with deep implications for investors and international fixed income markets.
After the massive sell off triggered following the announcement by Donald Trump of retaliatory tariffs on the infamous Liberation Day on 2 April 2025, and the ongoing withdrawal of the Chinese from U.S. Treasuries, a partial reversal of the trend is being recorded.
Despite declarations in the established financial press that American debt is safe, the famous “bond vigilantes” are not buying it.
They know the dire fiscal position of the country, that in 2026 bonds worth 9 trillion dollars mature, which had been sold at almost zero interest rates and now must be refinanced at a higher servicing cost.
Sovereign funds and energy and defense deals
What happened is that Donald Trump has persuaded sovereign funds to bet on dollar denominated assets from Saudi Arabia and Norway, while Canadian funds were also present, seeking involvement in defense and energy deals, as the defense budget, according to the wishes of the administration, is expected to increase by 500 billion to 1.5 trillion dollars, while the big bang with Venezuela’s oil is changing global energy balances.
The key conclusions include:
1) Global holdings of U.S. Treasuries increased by 112.8 billion dollars, approaching the historical record of 9.36 trillion dollars, reflecting strong international demand amid economic uncertainty.
2) China continued its policy of distancing itself from the dollar system by reducing its holdings by 6.1 billion dollars, to 682.6 billion dollars.
This marks the ninth consecutive month of divestment and the lowest level since 2008.
3) Japan and Britain maintained their positions as the largest holders of American debt, while Canada, Norway and Saudi Arabia emerged as significant buyers, driving the overall increase.
4) Net capital inflows into the United States amounted to 212 billion dollars, with strong foreign purchases of long term securities indicating currently sustained confidence in American assets.
5) This divergence between broad global accumulation and China’s strategic reduction offers critical signals for portfolio allocation and risk assessment in 2024.
New historical high in international appetite for American debt
The Ministry of Finance published the International Capital Flows Report on 15 January 2024, providing an accurate “snapshot” of cross border investments for November.
The main highlight, the historical record of 9.36 trillion dollars in foreign holdings of U.S. Treasuries, signals a strong reaffirmation of the dollar as a “safe haven”, as dedollarization policies by the Global South evolve.
This milestone coincides with a four month rally in the Bloomberg U.S. Treasury Index, combining valuation gains with real net purchases by international investors.
The TIC data function as a barometer of global fund confidence, and the November rise has multiple dimensions.
It includes both new net investments by foreign entities and the effect of rising bond prices on existing portfolios.
The report shows that foreign investors were net buyers of 221.8 billion dollars in long term American securities, with private investors accounting for 157.8 billion dollars.
This suggests that, beyond official foreign exchange reserves, market driven demand is a key pillar of the rise.
China’s strategic divestment: a persistent trend
While the rest of the world increased its exposure to American debt, China clearly and steadily followed the opposite direction.
Its holdings declined by 6.1 billion dollars in November, to 682.6 billion dollars, sealing a nine month divestment sequence that began in March 2023.
This is the lowest level since 2008, while holdings have remained below the 1 trillion dollar threshold since April 2022.
As the third largest foreign holder of American debt, China’s moves carry strong symbolic significance and weight regarding long term market behavior.
Historical context and motives behind the sales
The reduction is not a new phenomenon but part of a long term strategic realignment.
Analysts point to several factors driving this development:
1) Foreign exchange reserve diversification: Reduction of reliance on the dollar through increased allocations to gold, euro denominated bonds and assets of countries under the Belt and Road Initiative strategy.
2) Geopolitical risk management: Trade and technological tensions with the United States heighten the need to limit potential financial pressures.
3) Yields and currency: Despite rising American yields, stabilization of the yuan and capital outflow controls may have strategic priority.
4) Tactical market moves: Profit taking during periods of price increases or restructuring the duration of foreign exchange reserves.
The current trend stands in sharp contrast to the period after the 2008 crisis, when China was a massive buyer of American debt.
New buyers emerge
Japan, the largest foreign holder, increased its holdings by 2.6 billion dollars, to 1.2 trillion dollars, the highest level since July 2022.
Britain added 10.6 billion dollars, reaching 888.5 billion dollars.
Japan’s steady accumulation amid a weak yen
The weakness of the yen and the ultra loose monetary policy of the Bank of Japan make U.S. Treasuries attractive.
With yields on Japanese government bonds constrained, American bonds offer superior returns, particularly for insurance and pension funds.
The rise of new players
1) Canada: Increase of 53.1 billion dollars, to 472.2 billion dollars.
2) Norway: The sovereign pension fund increased holdings by 25.2 billion dollars.
3) Saudi Arabia: Increase of 14.4 billion dollars, indicating continued recycling of petrodollars, a trend that is being questioned regarding the long term outlook as oil prices show a downward tendency.
Broader capital flows and market implications
Total net inflows into the United States amounted to 212 billion dollars, confirming the enduring attractiveness of the dollar.
Net purchases of Treasury bills were limited (400 million dollars), indicating a preference for longer duration securities.
Synthesis of trends for forward looking strategy
The November data outline a world of diverging strategies.
On the one hand, the global accumulation of U.S. Treasuries demonstrates the preservation of confidence in U.S. creditworthiness within a specific framework.
On the other, Beijing’s strategy reflects a shift toward financial autonomy.
The key conclusion is that global capital flows are becoming more multipolar.
The dollar remains central, but players such as China are actively reshaping their role.
This does not foreshadow an immediate dollar crisis, but a gradual reordering of the monetary system.
Investment trends and sovereign wealth funds
Further supporting the above are data from sovereign wealth funds and public pension funds, which channeled the impressive amount of 132 billion dollars, about half of their total investments last year, into the United States in 2025, while major emerging markets attracted nearly one third less capital compared with 2024, according to an annual report published on Thursday 1 January.
These giant investors, together with central banks, managed record assets of 60 trillion dollars last year, according to the Global SWF report, with sovereign wealth funds accounting for two thirds of the capital invested in the United States during the year.
“There was a paradigm shift regarding recipient countries”, wrote Global SWF chief executive Diego Lopez in the data analysis, adding that the world’s largest economy benefited from investments focused on digital infrastructure, data centers and artificial intelligence companies.
The surge in sovereign wealth fund assets
The assets of sovereign wealth funds alone also reached a new historical high of 15 trillion dollars, according to the report, which uses a combination of public data and official disclosures to track assets and spending of sovereign investors globally, including investment and pension funds as well as central banks.
Overall, investments by sovereign wealth funds increased by 35%, reaching 179.3 billion dollars.
Decline in exposure to emerging markets
The channeling of investments toward the United States came, however, at the expense of emerging markets, despite their particularly strong performance in 2025.
“The biggest losers were emerging markets, especially China, India, Indonesia and Saudi Arabia, which received disappointing levels of investment in 2025: a 28% decline compared with 2024 and only 15% of the total”, wrote Lopez.
By contrast, private credit investors have begun turning toward emerging markets, seeking higher returns and more favorable project structures, according to the report.
All 11 new sovereign wealth funds created during the year originated from emerging markets, however, with crude oil prices under pressure, 2026 may bring changes for today’s major “players”.
Saudi Arabia already has plans to reorient spending due to low oil prices and delays in flagship projects.
“The new capital will depend on the source of revenues: oil based sovereign wealth funds will find 2026 another difficult year, as revenues remain stagnant, while natural gas and metals such as copper will fuel new flows”, wrote Diego Lopez.
The map of Saudi investments
The United States maintain their attractiveness – Games with Big Tech and petrodollars
Investment flow data, as noted by Diego Lopez, do not include the estimated 2.2 trillion dollars in shares of the so called Magnificent 7 – Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta and Tesla – already held by sovereign wealth and pension funds.
The impressive amount of 132 billion dollars, that is 48% of total capital from pension and sovereign wealth funds, was directed to the United States.
Investments in emerging markets fell to the lowest level of at least the past five years.
Saudi Arabia was the first foreign destination of Donald Trump during his second term, while in November he hosted at the White House the powerful Saudi Crown Prince Mohammed bin Salman.
Trump stated that Saudi Arabia agreed to invest 600 billion dollars in the United States, while Bin Salman committed to raise the total amount to 1 trillion dollars.
Abu Dhabi has committed 1.4 trillion dollars in investments in the United States, while Qatar plans investments of 500 billion dollars over the next decade.
The Public Investment Fund (PIF) of Saudi Arabia, with investment commitments of 36.2 billion dollars, of which 80% will be directed to the acquisition of the videogame company Electronic Arts, as well as Abu Dhabi’s Mubadala, with a record 32.7 billion dollars, were the two largest investors.
Gulf funds PIF, the Abu Dhabi based company L’imad Holding Company PJSC and the Qatar Investment Authority are also key financiers of Paramount Skydance’s aggressive bid to acquire Warner Bros Discovery.
The Canadian fund CPP, La Caisse, as well as Singapore’s sovereign wealth fund GIC, were alongside PIF and Mubadala among the five largest investors.
Dedollarization is not something that will happen in a single day, despite the slogans being heard. Trump will attempt to use all the power of the United States in order to avoid a full collapse into a monetary order with many players.
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