China is closing a quarter of its banks to get ahead of a financial crisis, and the knock-on risk lands on American borrowers.

• Beijing has shut about a quarter of the country's banks to merge weak lenders into fewer, better-funded ones.
• Small rural banks are the weak spot — bad loans, thin capital cushions, and poor oversight.
• The damage traces back to the property bust, when big lenders defaulted after builders stopped paying their debts, and the economy is now slowing further under tariffs.
• A China in trouble saves itself first, which means buying fewer US bonds and possibly selling what it holds — the same thing Japan has been doing.
• Fewer buyers for US debt pushes interest rates up, and mortgage rates could climb toward double digits.

Outlook: Expect more Chinese bank closures and more pressure on US interest rates if Beijing keeps stepping back from Treasuries.