Since 2022, China has accumulated a net deduction of US debt of $30.96 billion, and at the moment, the U.S. government is once again playing the shutdown code, although Trump said in his mouth there are benefits, But in the eye of this shell, personally shouting to China to talk well, even the U.S. finance minister again blows the wind, saying that the next round of China-U.S. trade negotiations will "a considerable breakthrough", but the response of the Chinese side is a bit remarkable, experts said straight: China's royalties have worked.

The US government officially closes

Due to the provisional funding bill, the United States two parties irreconcilable differences, after seven years, the U.S. government again shut down, although this is no new thing.

At the end of each fiscal year, The U.S. Congress is often stuck in a long-running budget debate, making it difficult for budget bills to be passed smoothly. As a result, government departments face financial chain breaks, difficultyining regular operations, public servants are forced into unpaid holidays, public facilities such as national parks are closed, and many public services are therefore suspended.

In-depth analysis of the reasons behind it, it is not the exhaustion of the federal government's financial resources, but the intense interest games and disputes between the various factions in the political field, which are unwilling to easily compromise concessions, but ultimately suffer the adverse consequences of the general public.

It is well known that the U.S. government¡¯s funding sources rely mainly on the issuance of government bonds, although the issuance of debt has a debt ceiling, but this closure is not due to the debt ceiling, but in the context of the current U.S. political environment shows a highly polarized trend, the political compromise becomes increasingly difficult to reach.

On fiscal issues, one faction strongly advocates for strict control of government spending, while the other party firmly refuses to make any substantial concessions.

Therefore, the government's "stop-down" event is more of a very intuitive way to publicise the deep-seated financial problems facing the United States at the moment.

Specifically, the funds held by the Treasury Department are about to be exhausted, while Congress has failed to agree and approve the budget.At the same time, the markets have shown a marked decline in the willingness to take on U.S. government bonds.

In the past, there was a Fed receiver, when no one bought U.S. bonds, through the printing of banknotes, but according to the data showed that in just over three years, the Federal Reserve has reduced its holdings of $ 1.6 trillion, and the Federal Reserve's reason for significantly reducing its holdings is to use this to control inflation.

At present, for a series of reasons such as Trump's tariffs, inflation in the United States is on the rise. Even during the interest rate cut period, the Federal Reserve is still shrinking its balance sheet, which means that if the Federal Reserve still prints money to buy U.S. bonds at this time, it will Further aggravate inflationary pressures.

In this context, the U.S. finances have fallen into a dungeon, and Trump authorities have discovered that China has been cutting down on U.S. debt since 2022.

China's Ace Worked

Specifically, in 2022, 2023 and 2024, China reduced its net holdings of US$173.2 billion, US$50.8 billion and US$57.3 billion respectively, while in the first month of 2025, it reduced its net holdings of US$28.3 billion, with a cumulative reduction of US$309.6 billion.

Today, the size of positions has dropped to a new low in 2009, reaching US $730.7 billion.

But surely someone will ask, has China¡¯s initiative to reduce US debt achieved the expected effect?

In fact, China's reduction of U.S. debt holdings is not a temporary whim or emotional decision, nor is it for the purpose of creating topic speculation, but a strategic adjustment based on careful analysis and long-term considerations.

In the past, China has allocated large amounts of U.S. bonds, mainly based on the relative stability of U.S. dollar assets at the time and the growth momentum shown by the U.S. economy.

However, the current international economic and financial situation has undergone profound adjustments.

Specifically, the U.S. fiscal sustainability faces severe challenges, inflation rates are characterized by sharp fluctuations, monetary policy interest rates are frequently adjusted and lack clear direction, and the federal government debt ceiling issue continues to cause policy uncertainty, leading to year-round difficulties in relevant negotiations.The impasse.

In this context, the credit base of U.S. Treasury bonds as traditional safe-haven assets has been substantially weakened, and market participants have to reassess the security of their asset allocation.

Moreover, China-US relations are becoming more and more tense, don't look at the repeated screams that China-US relations are good, but behind the Trump authorities have been trying to counter China.

But the two-way Trump has profoundly realized that today's China would not be the same in Japanese language, not only holding rare earth cards, but also the US soybeans and U.S. debt are in need of China's huge market, so in the US government closing this node, Trump again shouted to China.

We want to talk well with China.

This means that Trump knows that he can no longer unilaterally pressure China like this, otherwise he will eat off the results.

As Professor Jin Canrong analyzed, the strategic resources currently held by China are far from being advantages in a single dimension, but have formed a strategic coordination system that spans multiple dimensions such as industrial system, resource reserves, financial network and consumer market. Each component of this system has independent strategic value and together constitute a complex power structure that cannot be ignored in the game against the United States.