The Strategist

Chinese banks advised to cut their holdings of US Treasuries



02/10/2026 - 01:48



Chinese regulators told financial institutions to lower their investments in US Treasury bonds, pointing to the dangers of having too much concentrated exposure and the potential for market fluctuations, according to Bloomberg.



Can Pac Swire via flickr
Can Pac Swire via flickr
According to Bloomberg sources, officials are encouraging banks to decrease their buying of US Treasuries and advising financial institutions that hold a significant portion of these assets in their portfolios to lower their holdings. 

This statement does not pertain to the government's ownership of US Treasury securities. 

Authorities stated their recommendations aim to spread out market risks, rather than indicating concerns about geopolitical issues or a broader lack of confidence in the United States' ability to meet its financial obligations, according to Bloomberg sources. 

Bloomberg reports that recent communications with China's major banks highlight increasing worries among Chinese officials about how large investments in U.S. government debt might expose local banks to significant risks from sudden changes in financial markets.  This reflects the worries of international investors, who are becoming more doubtful about Washington's financial responsibility and the future of the Federal Reserve's independence. 

US Treasury Secretary Scott Bessent mentioned last week that the US Treasury market last year showed its strongest performance since 2020, with auctions seeing high levels of demand from foreign investors. 

At the end of November 2025, the total amount of US government securities owned by non-residents reached $9.4 trillion, which is over $500 billion more than the same period in the previous year and represents a new all-time high.

source: bloomberg.com