China Urges Banks To Reduce US Treasuries Holdings Over Market Concerns

China: Chinese financial regulators have advised domestic banks to rein in their exposure to U.S. Treasuries, citing concerns over concentration risk and rising market volatility, according to a reports published on Monday.

Regulators Flag Concentration And Volatility Risks

Officials have asked banks to limit fresh purchases of U.S. government bonds and reduce existing holdings where exposure is considered excessive. The guidance, however, does not extend to China’s state-held reserves, the report said, citing people familiar with the matter.

The advisory is being positioned as a risk-management step aimed at portfolio diversification, rather than a signal of waning confidence in U.S. sovereign debt or a geopolitical move against Washington.

No Official Comment From Chinese Authorities

China’s central bank, the People’s Bank of China (PBOC), and the National Financial Regulatory Administration have not issued public statements in response to the report. There was no immediate comment on whether similar guidance has been shared with non-bank financial institutions.

The timing of the advisory is notable, as it reportedly preceded a phone call last week between Chinese President Xi Jinping and U.S. President Donald Trump.

Global Jitters Over US Debt Stability

Market concerns around U.S. government bonds have intensified in recent months amid uncertainty over Washington’s fiscal trajectory. Investors have been rattled by President Trump’s unpredictable trade policies, repeated criticism of the Federal Reserve, and sharp increases in public spending.

These factors have prompted questions among global investors about the long-standing safe-haven status of U.S. Treasuries, even as demand for diversification grows among large institutional holders.

(Via Agency Inputs)

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