My guess is that this might be a bit of "fake news" or some hyperbole. China is literally 'stuck' buying and selling US dollars in a tightly controlled and orchestrated manner in order to continue its' control (some say manipulation) of the Yuan. If every 12 months or so China takes in at least $400B + US Dollars in surplus they have to do something with it - and there are substantial restrictions on China's government buying US companies. In fact, Jack Ma (Alibaba) tried to buy MoneyGram for $1.2B and was rejected - and he's a private investor. China has indeed diversified into other interest-bearing debt denominated in other currencies - but that is a very shallow pool as compared to the US Treasury market. Point being, their choices are somewhat limited and some might argue that this is actually a much bigger problem for China than it is the US. The Chinese require a relatively low risk, large, liquid market denominated in US Dollars in order to continue to turn over their huge surplus receipts. In fact, the Chinese have been known to buy and sell US Treasuries through other foreign national intermediaries. It's kind of a circular firing squad - if China sells off US debt or even officially announced that it will no longer buy US debt the effect would depress the dollar and make the Yuan stronger, which is the last thing the Chinese government wants.
Of course what they really want is for the Yuan to be the reserve currency and USD hegemony to end. I’m quite certain they’ve got a long term plan on how they think they can make that happen and IMO are going to try and economically “island” the US to get there. China’s involvement in South America and Africa isn’t just for shits and grins.
And we heard exactly the same direction warnings about the Euro. Wanting and getting are vastly different things, especially in an increasing returns to adoption market like being the world's reserve currency.
https://www.bloomberg.com/news/arti...u-s-treasuries-holdings-by-most-in-six-months ZeroHedge... what a bunch of frauds... This data is from February though...
Well, that's the other area where the Chinese government policy of tightly controlling (some would use the term 'manipulate') the Yuan puts them into this circular firing squad scenario. Any "reserve currency" by definition must be allowed to fully float in the international marketplace and banking system. And the Chinese know that if they do that, the Yuan strengthens and that is what they are trying to avoid by any and all means. And China is starting to get some low cost manufacturing competition from Vietnam and India. South Korea has poached some of the higher tech manufacturing away from China in recent years as Chinese labor costs for higher end electronics and battery manufacturing has increased. And Vietnam has been particularly successful taking apparel manufacturing capacity away from China. Transit costs to the US and the EU are relatively the same for all of those locales. Point being, a stronger Yuan would only help China's regional labor arbitrage competitors.