China’s U.S. Treasury Divestment: A Geopolitical Bluff or Strategic Suicide?

“중국판 계륵 ‘美 국채 투매’… 결행땐 中도 막대한 손해”

The recurring discourse regarding China’s potential liquidation of U.S. Treasuries—often framed as a “nuclear option” in the escalating trade war—merits a rigorous logical deconstruction.

Should Beijing proceed with such a divestment, the resulting appreciation of the U.S. dollar would, paradoxically, alleviate Washington’s fiscal burdens and potentially reduce the U.S. trade deficit—the very focal point of the current dispute. From the American perspective, such an outcome might be welcomed as a strategic windfall rather than a crisis. Conversely, China would face a deleterious erosion in the valuation of its remaining dollar-denominated assets. Furthermore, any significant sell-off would likely be met by opportunistic purchasing from major global stakeholders such as Japan and the European Union, thereby neutralizing the intended geopolitical impact.

China’s persistent efforts to secure the Renminbi’s inclusion in the SDR and its aggressive deployment of aid across North Africa under the Belt and Road Initiative are not mere exercises in diplomacy. They are calculated, long-term hedges against this very structural vulnerability within the dollar-centric international order.