$8,500$ billion in U.S. bonds trapped in a sales bind! China’s position is clear—publicly announces it will say goodbye to the era of “rescuing the U.S.” from now on.

Since the reform and opening up, in substance it has basically been Deng Xiaoping aligning with the U.S. to counter the Soviet Union. How bad was the Soviet Union at that time—so bad that it had already reached the point of nuclear war. The situation was grave. Then when Deng returned to China, it was the “Sino-Vietnam border war,” a self-defense counterattack, because Vietnam was a Soviet lackey. The real essence of reform and opening up was opening up to the international order led by the United States, and then later on, economic entanglement—“Saving the United States is saving China.” That line sounds simple, but it is very plain, and very practical.

In 2008, there was a special turning point. The U.S. experienced the subprime mortgage crisis, and China shook along with it, so you could call it a sort of sham ally. With a lot of effort, China pulled the U.S. back, propping up its purchases of U.S. Treasuries. As a result, many private enterprises in China closed down. The logic is simple: the U.S. cannot collapse. Otherwise, our research and education resources, and our labor force employment market, would all decline. China needs to keep being friendly with the United States and, to an appropriate extent, demonstrate it.

All told, seventeen years have passed. A lot of things have happened in between. The specifics are too long to recount in detail; if you sort them out, you could write a whole monograph.

Now the Middle East is stuck in a deadlock, and domestically things will naturally change accordingly. There is a big piece of news that many people have ignored, but it has extremely strong leverage: China is substantially reducing its holdings of U.S. Treasuries. From a peak above $1.3 trillion in historical highs, it has now dropped to less than $13k—essentially cutting nearly half. And it looks like this will continue. In 2025 alone, China cumulatively net sold $75.5 billion of U.S. Treasuries. China and the U.S. are not exactly in an “icy period” right now, but absolutely not in a springtime warmth either. This strategic shift has been planned for nearly three years, and anyone involved in investing can spot a few clues.

Why is this happening? In March this year, the total amount of U.S. Treasury debt first crossed the $39 trillion mark. In October last year it was $38 trillion. Less than five months have passed, and it increased by $1 trillion. The U.S. government’s current borrowing already exceeds the full-year GDP of the entire U.S. Just the interest payments alone on the debt each year account for more than 50% of the fiscal deficit. It is like someone who borrows money every day—interest compounds on interest—and when the creditor suddenly demands repayment, that person collapses. Besides, the U.S. has frequent squabbles between the two parties over debt and no workable solution. In that kind of credit rating, who would dare to lend him money?

This is just like playing Texas Hold’em poker: China lays down the cards, and even NATO allies have folded, thinking there is no payoff if they keep playing.

Canada—an “infant” that is also being fully managed by the U.S. like Mexico—has seen its U.S.-asset holdings keep trending downward as well. Japan dreams of relying on good relations to seek “constitutional liberation” by strengthening ties in East Asia, but compared with the scale of the U.S.’s liabilities, it’s practically like trying to fill a dry reservoir in a great river with just a few garden hoses.

What about China? China says: “I’m not playing.”

The people at the top in our country have already seen it from the two leadership teams—Trump and Biden. The Americans won’t reflectively drive China along just because their own economy is doing well; for us, the cost is too high. The U.S. has all kinds of tariff wars and scrutiny of Chinese-funded companies. As the saying goes, there is “the story of the farmer and the snake” in advance—we’re not fools.

So, our strategy has completely changed.

On one side, slowly reduce the position in U.S. Treasuries—sell whatever can be sold. The pace is gradual, but the direction is fixed. On the other side, significantly increase gold reserves. By the end of February 2026, gold reserves will reach 74.22 million ounces. The point is that the linkage between the dollar and the gold standard needs to have its effect gradually weakened. Because to break through the U.S.-backed “allied defense and encirclement” across East Asia and the South China Sea, our Belt and Road needs to transition toward gold. In the future, it will be exchanges using the renminbi—there’s no need to talk about the dollar.

So why not just dump everything? I’m not playing along with you at all. It’s originally a werewolf game—no one pretend. The reason is simple: the market can’t absorb it all at once. If U.S. Treasuries were suddenly thrown in full, the U.S. dollar system would be tottering, and our foreign exchange reserves would shrink as well. Use an image as a metaphor: two people stand on the same narrow plank over a rushing stream. In the end, who crosses first and who crosses second? If they start arguing and one lightly shoves the other, since the bridge is already unstable, both get swept away by the current.

So as the old saying goes, “proceed steadily, with gradual intention.” I step by step, and slowly sell U.S. Treasuries. The Americans also understand psychologically what China is trying to do. It is also a reminder to the U.S.: you’re not the same America as before—don’t get too arrogant. U.S. Treasuries are America’s sword of Damocles. Even before the blade falls, you have to keep your heart on edge.

In summary, from “Saving the United States is saving China” to “abandoning illusions,” it is determined by the tide of the times, and it is the必经之路 on our path to rejuvenation. Our goals are no longer vague. Instead, it’s that song that says, “step by step, everything feels lighter.” Personal safety can temporarily rely on strong hands for protection, but once we’ve grown up gradually, hammering still depends on our own hard steel.

Author’s statement: personal opinions, for reference only