Chinese regulators have advised the country’s financial institutions to scale back their holdings of US Treasuries, citing concerns over market volatility and security.
This development comes as several BRIC nations – Brazil, Russia, India, and China – demonstrate a broader trend of reducing their exposure to American debt during the second Trump presidency.
According to sources cited by Bloomberg, Chinese banks are being encouraged to rethink their investment strategies in US government debt.
While Paul Donovan, global chief economist of Swiss financial services firm UBS Wealth Management noted that these banks are not currently dominant players in the US Treasury market, the shift in sentiment is gaining significant attention from international investors.
As of November 2025, the combined holdings of Mainland China and Hong Kong stood at $938 billion.
The move follows recent friction between the Trump administration and foreign investors. Last month, US Treasury Secretary Scott Bessent dismissed suggestions that foreign holdings could be used as leverage against White House policy.
However, observers noted that US President Donald Trump appeared to ease his tariff rhetoric following recent fluctuations in the bond market.
Data from the US Treasury reveals a steady “unwinding” of debt by BRIC nations between November 2024 and November 2025. Brazil’s holdings decreased from $229 billion to $168 billion during this period, while India’s holdings dropped from $234 billion to $186.5 billion.
China’s own holdings, which had climbed to over $900 billion in August 2025, fell to $888.5 billion by November.
Chris Turner, ING’s global head of markets, suggested that BRIC countries are “quietly leaving the Treasury market,” pointing to a mix of geopolitical factors and currency interventions, such as efforts to support the Indian rupee.
Despite these shifts, some analysts argue that the trend does not signal a total withdrawal. Innes McFee, CEO of Oxford Economics, stated that there is no concrete evidence of massive capital outflows from US assets.
Instead, he suggested that global investors, who remain heavily exposed to the US economy, are increasingly “hedging” their positions to protect against a weaker dollar and market headwinds.
While China remains the third-largest holder of US Treasuries, it trails Japan, which holds nearly double the amount, and the United Kingdom, which possesses approximately $888 billion in American debt.
