China has instructed its major banks to reduce their exposure to US Treasury bonds, aiming to manage risk amid market volatility. Banks are advised to limit new purchases and gradually scale down existing holdings, though no strict targets or deadlines were given.
The guidance focuses on commercial bank portfolios and does not affect China’s sovereign reserves.
Analysts say the decision reflects a broader trend of diversifying away from dollar-denominated assets, as Chinese holdings of US government debt have declined to multi-year lows.