China Urges Banks to Cut US Treasury Holdings Amid Volatility Concerns

• China's financial regulators advised domestic institutions to reduce exposure to US Treasuries.
• The People’s Bank of China (PBOC) and National Financial Regulatory Administration (NFRA) issued the advisory.
• Banks are urged to limit new purchases and gradually pare down high holdings due to concentration risks and market volatility.
• The guidance does not apply to China’s state-held reserves.
• Officials frame the move as market risk diversification, not a geopolitical signal or lack of confidence in US credit.