Every few years, Chinese officials send a warning shot Washington’s way, hinting that they could dump mountains of US Treasury securities to show America who is boss.
This “nuclear option” has been spoken of in hushed tones for years, spooking financiers fearing chaotic and disastrous collateral fallout since at least 2009. That year, then-Chinese Premier Wen Jiabao made a public plea to US Treasury Department officials.
“We have made a huge amount of loans to the United States,” Wen said then. “Of course, we are concerned about the safety of our assets. To be honest, I am a little bit worried.” He urged the US “to honor its words, stay a credible nation and ensure the safety of Chinese assets.”
Chinese state-run media have since periodically hinted that Beijing might go nuclear, in the financial sense. In 2011, the People’s Daily argued that Beijing should “use its ‘financial weapon’ to teach the US a lesson.” At that time, the flashpoint was Washington cozying up to Taiwan.
In May 2019, the Global Times reminded the White House that Beijing could pull the rug out from under America’s borrowing programs. Hu Xijin, editor-in-chief of the pro-Beijing publication, wrote that “Chinese scholars are discussing the possibility of dumping US Treasuries and how to do it specifically.”