It’s not just Danish pension operators.

More often than not in recent years, the de-dollarization debate revolves around China, and specifically the Chinese state’s formerly vast holdings of US Treasurys.

I say “formerly.” That stockpile’s still immense, but at $682.64 billion in November (the latest month for which data’s available), it’s now the smallest since 2008.

I’ll include the obligatory side note: Custodial holdings in Belgium were $481 billion in November. Some of that’s held on behalf of Beijing.

Belgium aside, long gone are the days when China was officially the largest holder of US government debt. Japan now has an unchallenged claim on that (somewhat dubious) title. Tokyo’s holdings were $1.20 trillion as of the last TIC update.

A long-running de-dollarization doomsday canard says a fed up China might decide to “dump” its holdings overnight. Spoiler alert: That isn’t going to happen. Setting aside the political fallout in Washington, the logistics would be challenging, to put it politely. And what of the yuan in such a scenario? It’s soft-pegged to the dollar, and China’s economy depends more heavily on exports than ever.

That said, China can trim its holdings steadily over time in favor of — to use the most obvious example — gold. As one popular strategist noted last week, China’s official gold-buying spree was likely the initial impetus for a bullion rally which eventually took on a life of its own.

If Xi Jinping intends to move on Taiwan in his lifetime — and I think he does — China would do well to have the smallest pile of US Treasurys as is operationally feasible when the PLA crosses the Strait. Because depending on who’s in the Oval Office, those assets, as well as a lot of other G7 claims, could be given the Russia treatment.

With all of that in mind, Bloomberg said Monday the Party in Beijing told domestic financial institutions to carefully manage or even pare down their US government debt holdings. Banks seen as having too much exposure to Treasurys were told to trim their positions.

Although the official excuse is that Treasurys could turn more volatile, thereby making concentrated positions undesirably risky, the geopolitical angle’s difficult to ignore. The directive doesn’t apply to China’s state holdings which, again, have been falling for years.

“[Beijing’s] worries echo those made by governments and fund managers elsewhere amid a brewing debate over the safe haven status of US debt and the appeal of the dollar,” Bloomberg wrote in the linked article, adding that as of last summer, Chinese banks had around $300 billion of USD bonds on their balance sheets, although it’s impossible to know how much of that’s Treasurys.

Regardless of rationale, Beijing’s guidance to domestic banks is yet another piece of evidence to suggest foreign holders view US government debt as a riskier proposition than it once was, which makes sense considering the architecture of the post-War global order which fostered and facilitated USD dominance is crumbling, in part due to epochal shifts in US foreign policy.

And yet, total foreign holdings of US Treasurys continue to hit records. The last official data put the global stockpile at $9.36 trillion driven higher by, ironically in the context of recent events, Canada and Norway.

Thank God for “TINA.” Or, as I put it last week, “it’s a good thing there’s no viable alternative, because if there were, investors the world over would be defecting in droves.”