China, as of Jan 2025, holds between 800 billion and 1.2 trillion in US bonds.

Can they afford to trigger a bond panic that leads to large losses on that position?

But what if they are hedged?

China has $ 300 bn in gold (low estimate).

A 20% loss on their US bond position would be offset by a 65% gain in gold.

Gold has already risen more than that in the past 2 years.