Financial Restraint: Why China Will Not Use US Treasuries as a Weapon.

According to Reuters, there is a myth in the financial war between China and the US about the possibility of selling Chinese holdings of American bonds, which could lead to a collapse of the dollar and destabilization of the US economy. However, this threat is more of a myth than a reality. It is noted that US dollar assets constitute only 55% of China's foreign exchange reserves, which is significantly less than before. Additionally, the holdings of US government bonds have also decreased and now account for less than 3% of the total market. Thus, selling bonds would be disastrous for China, as it would cause significant losses to the Chinese economy. Therefore, it is more beneficial for China to gradually and passively reduce these positions rather than destroy them and undermine the dollar.