This short Bloomberg article is written from a Chinese point of view; i.e., that China finds itself in a trap having sold over a trillion dollars in goods in exchange for what may become worthless pieces of US debt. If it tries to shed itself of this debt too openly and too rapidly, it could suffer a collapse in the value of its holdings and set off a worldwide financial crisis.
The larger picture is that the collapse will be worse the longer China dithers and does nothing. It is clear that the US Federal Reserve Bank has no intention of restoring sound money any time soon. How can it when federal spending is so out of control that the US Congress last week completely suspended the budget ceiling? The Fed will monetize whatever US Treasury bonds the open market will not buy at a very high price.
The US Fed is the culprit, but China was always the willing stooge.
This crisis will end when a major player like China decides that enough is enough. As horrific as the cleansing may be, it is simply reality revealing itself. There never was an unlimited international appetite for US Treasury debt. The world bought the debt only because it assumed that America would honor the debt in money of equal purchasing power. For a long time now, no one has believed this fairy tale. But everyone is afraid of the necessary and inevitable recession/depression to come. The longer we wait the worse it will be.