It doesn't matter whether it is Chinese regional banks, or SAFE, or any other instrument. Brad Setzer tries to do a heroic job decoding this stuff at his CFR blog (https://www.cfr.org/blogs/follow-the-money) but at the end of the day, all that matters is total foreign holdings of dollar denominated assets - that measures their exposure to the dollar.

Everything else is portfolio allocation choices between treasuries or agencies or BAA corporates or AAA corporates, there are so many different instruments to invest in, you can shift your holdings back and forth however you like, all while keeping your dollar exposure exactly the same. And you can set up a fund in the Caymans and hold your assets there. And China does all of that. So really it is all fungible once you are in the "foreign ownership" bucket.

Your point about dollar exposure is true, we just have limited insight into foreign private ownership, as the article points out. If nations are using these vehicles to conceal their dollar exposure (or for some other purpose that results in the same effect), then we will have trouble understanding the functioning of the global economy and the risks present in the system. That seems important.

Also, equities and treasuries are not equivalent. If foreign holdings are moving to equities over treasuries, the added risk will be a serious problem in a crisis. It could also be a sign that some nations are being “encouraged” to prop up equity markets, either by the US or large domestic holders of US equities, which is a rumor that I’ve come across.

(If they are just shifting from treasuries to other types of bonds, that’s less risky but still moreso than treasuries. And it may affect yields.)