Chinese Banks to Limit US Treasuries: What it Means for the Markets

Chinese regulators have quietly told major commercial banks to limit new purchases of U.S. Treasuries and gradually reduce large holdings, citing concentration and market volatility risks, according to Bloomberg report.  The guidance, which does not apply to China’s sovereign reserves, was communicated verbally and sets no specific targets or timeline, sources say. China Remains Third-Largest Holder China ($683 billion) is currently the third‑largest foreign holder of U.S. Treasuries after Japan ($1.2 trillion) and the United Kingdom ($888 billion).  China’s holdings of U.S. Treasuries gradually declined through most of 2025, falling from around $732.7 billion in June to $682.6 billion by November.