, Columnist
China Has Lots of Treasuries, Not Much Leverage
Three reasons not to fear a big selloff of U.S. debt.
Who's the hostage?
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In recent years, China's relationship with the U.S. has resembled nothing so much as a hostage situation. Beijing's enormous holdings of Treasuries gave it immense leverage over Washington, which lived in perpetual fear of China choosing to not finance any new debt, or sell off its current holdings.
That worst-case scenario is closer than ever to becoming a reality -- or so say the Republicans who are vying for their party’s presidential nomination. But one important point has escaped Donald Trump and company: If the dynamic between China and the U.S. is still a hostage scenario, the roles have been reversed.