Chinese regulators have told state-run banks to cut purchases of US Treasuries, citing concentration risks and market volatility, the request surfaced in recent reporting. According to reporting, regulators want banks to pare positions to limit exposure.
The guidance follows concerns that large Treasury holdings could cause sharp losses during market swings. People’s Bank of China and the National Financial Regulatory Administration have not publicly detailed the scale of bank Treasury holdings.
China holds about $298 billion in dollar-denominated assets, per official figures, but the Treasury share is undisclosed (Ed. note: precise Treasury allocations remain confidential). State Administration of Foreign Exchange data shows the total dollar assets figure.
Global fund managers are also trimming Treasury exposure to diversify risk rather than for political reasons. Investors flag Washington’s fiscal position as a concern as the national debt nears $40 trillion and the US dollar has weakened since 2021.
Market attention rose after Donald Trump signaled comfort with a weaker dollar, a stance that some investors see as lowering the currency’s safe-haven appeal. Analysts and central banks are increasingly debating the role of Treasuries in reserves.
