China Warns Banks to Rein in Holdings of US Treasuries

China Warns Banks to Limit US Treasury Holdings Chinese regulators have advised financial institutions to reduce their holdings of US Treasuries, according to sources familiar with the matter. The move is driven by concerns over concentration risks and market volatility. The warning comes as China seeks to manage its exposure to the US debt market, which has become increasingly volatile in recent years. Regulators are reportedly worried about the potential risks posed by a large concentration of US Treasury holdings within the Chinese financial system. The directive is part of China's broader efforts to diversify its foreign exchange reserves and reduce its reliance on the US dollar. The country has been actively exploring alternative investment options, including increasing its holdings of other sovereign debt and expanding its portfolio of domestic assets. The decision to limit US Treasury holdings reflects China's growing unease about the stability of the US financial markets and the potential impact on its own economic and financial interests.