China is a manufacturing hub with an export-driven economy highly dependent on exports to the U.S.Chinese exporters receive U.S. dollars for the goods they sell to the U.S., but they need renminbi to pay their workers. They sell dollars to get RMB, increasing the dollar supply and raising demand for RMB. China wants to maintain export-led growth, so its RMB must be lower in value than the dollar so prices can be cheaper. China’s central bank buys excess U.S. dollars from exporters and gives them RMB to keep the dollar rate higher. Otherwise, the RMB would appreciate, making Chinese exports costlier, leading to unemployment as exports slow. But by keeping the RMB low, the dollar piles high among China’s forex reserves. China puts its trillions of dollars in forex reserves in the safest investment it can find—U.S. Treasury securities. This means China is making loans to the U.S. so the U.S. can keep buying China’s goods. Both nations benefit. China gets a huge market for its products, and the U.S. pays economical prices for China’s goods. If China offloaded some of its U.S. debt, an excess supply of U.S. dollars would reduce the dollar’s value and make the RMB appreciate. China’s products would cost more, ending China’s pricing advantage. China’s trade surplus would then become a deficit, something no export-driven economy wants.