The moment that many a US Treasury secretary feared for decades may have arrived: when Washington's top bankers turn against US government debt.

Case in point: America's No 2 financier in Asia — China — is reportedly advising banks to cut their exposure to US government securities. Though officials in Beijing haven't confirmed the advisory, few traders doubt the context behind it — or the timing.

"If China was to ditch their Treasuries in a large-scale selling program, this would cause US and global yields to spike and would cause major disruption to the global economy," said Kathleen Brooks, research director at brokerage XTB.

"The bond market is taking the view that China won't do this," Brooks added, "and if they do reduce the size of their Treasury holdings, they will do this in a slow and gradual way. Hence why yields are mostly stable so far."

UBS economist Paul Donovan noted that even if China isn't threatening to dump official holdings of US dollars, "the idea that international investors may be less inclined to buy US Treasuries in the future (without dumping existing holdings) is getting attention in markets."

In the first year of his second term in office, US President Donald Trump has busily worked to trash trust in the dollar.

He has pushed the national debt toward US$39 trillion, attacked the Federal Reserve, imposed heavy tariffs on friends and foes alike, and shaken up the globe with geopolitical adventurism run amok.

These policies and others have the dollar and US Treasury yields in yo-yo mode. Officials in Beijing—particularly at the People's Bank of China— have concerns about the safety of the combined $938 billion in US Treasuries. They also have President Xi Jinping's inner circle revising Wen Jiabao's 2009 fears about the dollar.

Sixteen-plus years ago, then-Premier Wen implored Washington to protect its AAA status. "We have made a huge amount of loans to the United States," Wen said. "Of course, we are concerned about the safety of our assets. To be honest, I am a little bit worried."

Washington, Wen stressed, must "honor its words, stay a credible nation and ensure the safety of Chinese assets." Two years later, the fears of Wen's Communist Party were realized when S&P Global downgraded the US's top-notch rating to AA+. It prompted state news agency Xinhua to scold the US over its "addiction to debt."