Treasury Mandated to Conduct Public Study on Financial Risks Posed by China Within One Year

The China Financial Threat Mitigation Act of 2025 starts not with a ban or a new regulation, but with a homework assignment for the Treasury Department. Essentially, Congress is telling the Secretary of the Treasury, along with the Fed, the SEC, the CFTC, and the State Department, to get in a room and figure out exactly how exposed the U.S. financial system is to potential trouble in China.

The Year-Long Deep Dive

Section 2 of this Act requires the Treasury Secretary to conduct a comprehensive study and produce a public report within one year. This isn't just a casual look; it’s a detailed risk assessment. They have to analyze what would happen to U.S. and global markets if China’s financial sector hit a major snag—think of it as stress-testing our entire economy against a worst-case scenario in Beijing. For the average investor or someone with a 401(k), this is about understanding the systemic risks that could suddenly wipe out gains or trigger a recession.

Checking Our Defenses and Their Data

Part of this study involves checking the U.S. government’s current defenses. They need to detail what we are already doing to stabilize the economy against these foreign risks. But here’s the tricky part: the report must also evaluate the quality of the economic data coming out of China. We’re talking about how open, complete, and trustworthy their numbers—like GDP growth or debt levels—actually are. If you’ve ever tried to make big decisions based on incomplete or questionable data, you know how difficult that is. The government is essentially admitting they need a better read on the foundational numbers they rely on.

What Happens Next

Once the analysis is complete, the Treasury needs to include recommendations for future action. This means suggesting what the U.S. should do next, both domestically and internationally, to work with allies and mitigate these financial threats. This is where the rubber meets the road, as these recommendations will likely form the basis for future, more concrete legislation. Crucially, the main findings of this report must be made public and posted on the Treasury website within that one-year deadline, though a separate classified annex is permitted for sensitive details. This requirement ensures that policymakers, financial institutions, and the public will eventually get a clearer, coordinated picture of the risks involved, helping everyone from Wall Street traders to Main Street business owners prepare for potential economic turbulence.