China’s Pullback From U.S. Treasuries Raises Global Market Risks
China is quietly stepping back from one of the pillars of the global financial system: U.S. Treasuries.
Key takeaways:
- China has told major banks to cap and reduce U.S. Treasury exposure
- Holdings have fallen to about $683 billion, the lowest level in years
- Regulators cite rising volatility and interest-rate risk in U.S. debt
- The move challenges the long-held view of Treasuries as “risk-free”
Regulators in China have instructed major state-owned banks to limit and gradually reduce their exposure to U.S. government bonds, signaling a notable shift in how the world’s second-largest economy views traditionally “safe” assets.
🇨🇳 CHINA IS QUIETLY PULLING BACK FROM U.S. TREASURIES
China just told its big banks to limit and cut their holdings of U.S. Treasuries.
It now only holds $683B in U.S. govt bonds, its LOWEST in years, down from $1.3T in 2013.
For years, Chinese banks piled into Treasuries as… pic.twitter.com/5jomCprBAm
— Coin Bureau (@coinbureau) February 9, 2026
As a result, China’s Treasury holdings are now far below their 2013 peak of roughly $1.3 trillion. For years, Chinese banks treated U.S. debt as a stable reserve asset, ideal for capital preservation. That assumption is now being reassessed, with regulators warning that large Treasury positions could expose banks to sharp price swings as rate volatility and fiscal uncertainty increase.
Why a Pullback From Treasuries Matters Globally
U.S. Treasuries sit at the core of global finance, acting as the benchmark for interest rates across equities, bonds, currencies, and derivatives worldwide. When a buyer as large and structurally important as China steps back – even gradually – the impact can extend far beyond the bond market.
Lower demand can push Treasury yields higher, raising borrowing costs and adding pressure to equity valuations. Currency markets may become more volatile as capital flows adjust, while risk assets could see choppier price action. At the same time, liquidity may tighten during periods of stress, when Treasuries are normally relied upon as a stabilizing anchor.
Markets are increasingly treating China’s move as a warning rather than a routine portfolio adjustment. The shift suggests that confidence in the world’s “risk-free” asset is no longer absolute. If other major holders begin to share China’s concerns, the repricing of risk could ripple through the global financial system in ways investors are only beginning to price in.
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Alexander Zdravkov is a person who always looks for the logic behind things. He has more than 3 years of experience in the crypto space, where he skillfully identifies new trends in the world of digital currencies. Whether providing in-depth analysis or daily reports on all topics, his deep understanding and enthusiasm for what he does make him a valuable member of the team.
