The root cause of the U.S. debt crisis is mainly from the Federal Reserve's interest rate hike policy, which has led to inflation problems. Yellen believes that this is only a temporary issue, but many countries disagree. China is the second largest creditor of U.S. bonds, selling U.S. bonds for 14 consecutive months, reaching $541.9 billion, setting a new record for China's holdings of U.S. bonds, while significantly increasing its holdings of ** reserves. Not only China, but also Japan, the United Kingdom, South Korea and other countries have also sold US bonds, and take ** as the main investment direction. At present, 121 countries around the world have collectively taken action to sell US bonds and increase their holdings**, forming a wave of "de-dollarization". The US has repeatedly sought help from China, hoping that it will take over the US bonds issued in the next quarter and stop selling US bonds. However, China was dissatisfied with this and rejected the request because of its past experience and the attitude of the US side towards the issue.
China extended a helping hand to the United States in the 2008 crisis of selling US bonds, but instead of expressing gratitude, the United States took some measures to hurt the Chinese economy. As a result, China has been more cautious in its response to the US debt crisis. In addition, China has proposed the establishment of a new currency with integrity and fairness to replace the hegemonic dollar system and promote common prosperity for the global economy. The move was seen as a sign that China wanted to surpass the United States as the new global leader. Sensing a threat to China's rise, the United States began to impose sanctions and suppression on China, causing trust between the two countries to evaporate. China believes that the monopoly of the US dollar has formed a bad atmosphere and harms the economic interests of some countries, so it has decided to sell US bonds to show its dissatisfaction with the hegemony of the US dollar.
The U.S. debt crisis has left the U.S. in debt as high as $33 trillion, and the financial deficit has reached the ceiling. The United States has long sought China's help to alleviate the crisis, but China has refused. U.S. Treasury Secretary Janet Yellen said on the grounds of rejecting the "preferential partial debt repayment" plan that this would give China priority in repayment, and would not conform to the practice of the U.S. side. In fact, the U.S. side rejected Japan's request for $280 billion in U.S. bonds, a move that made the outside world think that the U.S. has become a lazy person who does not repay its money. China's sell-off has deprived the U.S. of important creditors and will have a non-negligible impact on the U.S. economy.
While selling US bonds, China has massively increased its holdings of reserves and put forward proposals for a new monetary system. This reflects the strength and initiative of China's economy and paves the way for China to play a greater role in the global economy. However, China is also facing sanctions and repression from the United States, which requires us to be more cautious in our handling of industrial development and relations with the United States. China has achieved tremendous success over the past decade or so, and if it can properly deal with the impact of the U.S. debt crisis, it will continue to move towards its goal of becoming a global economic leader.
The outbreak of the U.S. debt crisis has triggered a chain reaction on a global scale, with many countries selling U.S. bonds and increasing their holdings**, forming a wave of "de-dollarization". China, the second-largest creditor of U.S. debt, has also participated in this effort and has put forward an initiative to build a new monetary system. This action demonstrates China's strength and initiative, and at the same time becomes a manifestation of China's greater voice on the global stage. However, China is also facing repression and sanctions from the United States, which makes us realize that international relations have become more complex and sensitive in the context of economic globalization. As a developing country, we need to respond more carefully to changes in the international economy and maintain stability and sustainability in our own development. By selling off U.S. bonds, increasing its holdings**, and advocating for a new monetary system, China is actively responding to the economic impact of the U.S. debt crisis, while also making efforts to achieve a global economy of common prosperity.