What makes this scenario speculative and especially sticky for China is their Government Party Policy of agressively maintaining a currency PEG with the dollar. The US Fed has a few options - probably more than the Chinese do. And as we’ve seen repeatedly, China has no qualms about unilaterally depreciating the Yuan.
re:no need to sell, the most likely scenario is china does snot roll maturing treasuries and boycotts future treasury auctions.