China may dump U.S. Treasuries as Sino-U.S. tensions flare - Global Times

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19. Not necessarily.

Suppose that China purchased 10-year Treasuries back in May of 2010. The yield at that time was 3.21%. A 10-year Treasury note pays interest at its fixed rate once every six months and pays the face value to the holder at maturity. China has been receiving interest payments on the Treasury bonds it holds, which is likely to be a mix of maturity dates. If it cashes in 10-year Treasuries now and declines to purchase new bonds, it loses nothing but decreases its total holding of US debt. And indeed current rates on Treasures are so low that there are many other investment opportunities with very little more risk.

China has a huge bargaining chip, and Trump handed it to them on a gold platter. China can simply demand payment for their matured bonds, which just adds to the US deficit. The question is how much US debt China holds that has not matured versus debt that has matured and they are declining to roll that over into new debt.