Bipartisan anti-China hysteria is picking up on news the Asian giant’s holdings of U.S. Treasury securities increased by $12.2 billion to a record $1.32 trillion and that its foreign exchange holdings now stand at $3.8 trillion. Partial equilibrium analysis proposes that China will dump all of these Treasuries at some point and crash the U.S. dollar, riding disaster to international supremacy. But until the renminbi, becomes an internationalized reserve currency, there is no way China could unload U.S. debt without it ruining its own economy.
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