What would happen if China sold its US bonds?

[aclark]

What would happen if China started to sell its US bonds?

What would the consequences be of such an action.

Any thoughts

Andy

[albert]

What would happen if China started to sell its US bonds?

What would the consequences be of such an action.

Any thoughts

Andy

I had just been reading about this topic on the FT. http://www.ft.com/cms/s/0/5b47c8f8-488c-11de-8870-00144feabdc0.html

It is interesting to note that Safe [China’s State Administration of Foreign Exchange] in the recent years began trying to diversify away from the dollar, while it has been adding to its gold stocks and taking small equity stakes in publicly listed companies all over the world.

Over the long term, Beijing hopes to reduce the size of its enormous reserves and cut exposure to US Treasury bonds by encouraging state-owned enterprises to use foreign exchange to acquire competitors abroad.