China — U.S. Treasuries
This is not a theatre of tanks and aircraft carriers. It is a quieter pressure system — structural financing, interest-rate sensitivity, and global liquidity.
China has been one of the largest foreign holders of U.S. Treasury securities. By holding Treasuries, China has helped fund U.S. growth and supported capital market stability.
The paradox is structural: the world’s two most consequential strategic competitors are also financially entangled in ways neither can unwind quickly without damage.
- Yes: positioning and demand can influence yields and exchange-rate dynamics.
- No: major liquidation is not a clean weapon — it hits the seller as well.
- Result: the “flex” is possible, but it is mutually damaging.
China’s advantage is optionality: the ability to act — or not act — when conditions suit. Optionality is not noise. Optionality is power. It forces the other side to price risk continuously, even if the event never occurs.
The point is not that Treasuries are a cinematic trigger. The point is that they are a pressure system — and pressure systems are how long games are won.