Chinese can sell debt to support Yuan (not just to punish the US)
As the trade war has continued there has been a sell off in the Yuan which you can see here on the USD/CNY chart.
Price has sliced through a series of daily pivot points as Yuan weakness has taken hold. On the face of it this helps Chinese exports, but this is not Beijing's desire to have a much weaker Yuan. The reason is that China has prioritised curbing financial risks and the strategic goal of creating a global, stable currency. The last thing it wants is wild swings in the Yuan. Have a quick read about that here from the South China Post.
Now, one of the ways that China has been touted of hitting back at the US is via selling off some of it's $1 trillion in US debt. This is widely seen as an aggressive and impactful move. However, Wes Goodman via Bloomberg made the point that China has reduced US debt in 2016 and in 2018 amongst speculation that it was trying to support the Yuan. He goes on to say that any Treasury Sales could now be ' construed as being done to manage currency, not to punish the US'. Take a look at the relationship below of a falling Yuan and the sale of US treasuries
This is a good point and makes sense given the consequences of upping the ante against the US by China selling US treasuries. Certainly a point to keep in mind if we need to make sense of any US debt sales. China have alluded to the possibility of it, so it remains to be seen whether that is an avenue they want to truly pursue in order to hit back at the US as opposed to supporting the Yuan