Move seen as part of Beijing’s risk diversification strategy, even as global investors reassess the safe-haven appeal of US debt amid policy uncertainty in Washington
China’s financial regulators have asked domestic institutions to rein in their exposure to US Treasuries, citing concentration risks and heightened market volatility, Bloomberg News reported on Monday, citing people familiar with the matter.
The advisory, issued by authorities including the People’s Bank of China (PBOC) and the National Financial Regulatory Administration (NFRA), urged banks to limit fresh purchases of US government bonds, the report said, adding that institutions with relatively high exposure have also been told to gradually pare down their holdings.
However, the guidance does not extend to China’s state-held reserves, the report said.
Officials are said to have positioned the move as part of a broader effort to diversify market risk, rather than as a geopolitical signal or a reflection of waning confidence in US sovereign credit, the report said.
According to the report, the advisory was issued before Chinese President Xi Jinping held a phone call last week with US President Donald Trump.
The development comes at a time when global investors are reassessing the traditional safe-haven status of US Treasuries. Market participants have cited concerns over policy uncertainty in Washington, including President Trump’s shifting stance on trade and diplomacy, criticism of the Federal Reserve, and elevated public spending, as factors contributing to volatility in US debt markets.
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