Will Beijing De-Dollarize Or Dump US Treasury Debt?

Speculation has emerged that Beijing might use de-dollarization and selling off US Treasury debt as bargaining chips in trade negotiations with the US. However, these actions are unlikely to happen, especially as immediate bargaining chips. China has been promoting the yuan's international profile, but it is still heavily reliant on the US currency for its export-dependent economy. The dollar remains the basis for 80% of import-export activity and 90% of all currency transactions. De-dollarization would hurt itself more than the US and China, and both sides are aware of this. Selling off US Treasury debt is also unlikely, as it would deny China a liquid investment opportunity and impose losses on its balance sheet. A sell-off would also weaken the dollar's foreign exchange value, which would be counterproductive for China. Instead, China's central authorities would do better to weaken the yuan's foreign exchange value to make Chinese goods cheaper for dollar-based buyers. Beijing is unlikely to antagonize Washington in the ongoing negotiations, and talk of de-dollarization and asset sell-offs can be set aside for practical reasons. The outcome of the trade negotiations is still uncertain, but it is clear that Beijing has no interest in taking drastic measures that would harm its own economy.