Lately, I've been paying close attention to U.S. debt, and it's truly worth pondering. The U.S. national debt has already surpassed $35 trillion, and behind this number reflects an increasingly sharp problem—America is overdrawing on its credit.

Let's start with a core question: if China suddenly sells all of its U.S. Treasuries, could it really directly crush the U.S. economy? Many are interested in this hypothesis, but the reality is far more complicated than it seems.

Looking at the data, China holds about $771 billion in U.S. Treasuries, which accounts for only 2% of the total U.S. debt of $35 trillion. It sounds like a small proportion, but in the sensitive ecosystem of the international financial market, 2% is not a trivial number. It’s important to remember that U.S. Treasuries are the cornerstone of the global financial system; a small move can ripple through the entire system.

If China sells off U.S. Treasuries, what is the most direct chain reaction? The supply of Treasuries would surge, prices would fall, and yields would rise. This would mean higher borrowing costs for the U.S. government, which would have to pay more interest each year. But that’s just the surface. The deeper impact is the shaken confidence of global investors. Once doubts about the safety of U.S. Treasuries arise, other countries and institutions might follow suit and sell off their holdings, and at that point, the situation could truly spiral out of control.

I’ve noticed many people overlook a key point: China selling U.S. Treasuries is not necessarily good for China itself. The pile of dollars gained from such sales, if the dollar depreciates, would effectively mean asset devaluation. As the world’s largest foreign exchange reserve holder, China owns a large amount of dollar assets. If the dollar falls, the losses would be significant. That’s why China currently chooses to hold rather than sell, turning it into a form of economic diplomacy.

But even more interesting is another trend—de-dollarization. Compared to the immediate impact of China selling Treasuries, de-dollarization poses a more profound long-term threat to the U.S. economy. Nearly half of the world’s countries have begun promoting de-dollarization, including emerging economies and some traditional developed nations. The BRICS countries are establishing new financial clearing systems, and China is pushing for the internationalization of the renminbi. These actions are fundamentally changing the global financial landscape.

Let’s review how the U.S. uses dollar hegemony to harvest global benefits: whenever economic difficulties arise, it starts printing money, and dollars flow worldwide. Economically fragile countries borrow money to invest and consume. When the U.S. economy recovers, the Federal Reserve raises interest rates, and international capital flows back to the U.S. from other countries. The “Lost Decade” in Latin America, the Southeast Asian financial crisis, and recent economic turmoil in Argentina and Turkey all follow this logic. Countries have long grown tired of this game.

Therefore, although China selling U.S. Treasuries would cause some shocks, the real game-changer is the gradual global move away from dependence on the dollar. China plays a key role in this process. As the world’s largest developing country, every step it takes influences the global economic pattern.

Currently, the situation is that the U.S. faces dual pressures: on one side, the internal dilemma caused by the ever-expanding national debt; on the other, the external challenge of the global de-dollarization wave. China holds U.S. Treasuries like a “trump card,” and this chip will become increasingly valuable in future international economic negotiations. But the true game-changer is the ongoing collective effort of the world to reconstruct the financial order.