Just a thought, but if you have a position the size the Chinese do its extremely hard to unwind that position without moving the price against you. I dont know how many people on this forum have ever tried getting out of a trade when your position is large relative to the size of the market but you give up a lot of your profit. If the market got wind of the Chinese liquidating their US holdings i think there would be a lot of very nimble yet highly leveraged funds/smaller governments front running that trade. Now im not saying that wouldnt harm the US still. But wouldnt the Chinese be shooting themselfs in the foot because they will probably take a huge hit on the face value of the bonds they own? Im sure they would like to dump US debt, but they know their position is to big. If they really wanted to get out of their position they should have been doing it over the past 2 years when the FED has been buying soaking up any amount you want to sell. They are just too big to liquidate. The US bond market is the biggest Ponzi scheme in the history of finance i.e there isnt enough money to pay all the holders back their investment if they all walked out the same time. And China knows they will bring down the stack of cards to their own detriment Im not a bond trader so this is just my assumption