Chinese regulators have asked banks to dump US debt and Treasury holdings amid concerns over concentration risks and market volatilities, weeks ahead of US President Donald Trump's meeting with Chinese President Xi Jinping, Bloomberg reported on 9 February, citing sources.
Beijing has warned financial institutions of shock swings and advised them to curb US government bond purchases and reduce exposure, they added. China's state-owned holdings have not received the directives, the report said.
Notably, this came even before Trump's phone call with Jinping last week and weeks ahead of his scheduled visit to Beijing in April, as per the report.
The People’s Bank of China and the National Financial Regulatory Administration did not immediately respond to queries, it added.
What have regulators advised Chinese lenders?
According to the report, some of the biggest lenders in China have been advised verbally to pare down exposure to US government debt due to market uncertainty, sources told Bloomberg.
The advice was framed as “diversification” rather than for geopolitical reasons or loss of confidence, and came without specifics or time deadlines, the sources added, as per the report.
According to data from the State Administration of Foreign Exchange, Chinese banks held about $298 billion worth of dollar-denominated bonds as of September 2025. It was not clear how many of these were Treasuries.
Treasuries slipped on the news, with yields edging higher across maturities in Asian afternoon trading. The dollar weakened slightly against major peers.
Worry over US debt growing?
There is worry that the US debt is no longer a safe-haven investment option. A Deutsche Bank AG analyst warned in January that banks in Europe could trim holdings in US bonds amid Trump's push for Greenland and increased tariffs.
Notably, over the past 10 years, China’s overall state- and private-sector holdings of US Treasuries have consistently declined. Its stockpile has almost halved since a peak in 2013, dropping to $683 billion in November, the lowest since 2008.
Some analysts say the actual decline may be smaller, as Beijing may have shifted some of its holdings to custodian accounts in Europe. Belgium — whose holdings include Chinese custodial accounts, according to market analysts — has seen its Treasury holdings quadruple since the end of 2017 to $481 billion.
(With inputs from Bloomberg)
