If China were to cease buying Treasuries, or dare I say try to sell the trillions they are already holding, the market panic would cause the value of China's major investment to collapse and US interest rates to surge. The negative impact to both America and China would be dramatic - in all aspects (from their economies and employment to trade and investment to financial and capital markets). The global impact would be nothing short of devastating (ie. GFC 2.0) especially for Australia which has become over-reliant on exports to China. This is why, despite the rhetoric from both sides, the China-USA symbiosis termed Chimerica has bound both nations together. And they know it.
