In recent years, China's relationship with the U.S. has resembled nothing so much as a hostage situation. Beijing's enormous holdings of Treasuries gave it immense leverage over Washington, which lived in perpetual fear of China choosing to not finance any new debt, or sell off its current holdings.

That worst-case scenario is closer than ever to becoming a reality — or so say the Republicans who are vying for their party's presidential nomination. But one important point has escaped Donald Trump and company: If the dynamic between China and the U.S. is still a hostage scenario, the roles have been reversed.

Beijing has been trimming its holdings of Treasuries in recent months in order to prop up the yuan. Over the past year, its overall foreign exchange reserves have fallen by about $315 billion to $3.7 trillion. But the scale of these sales have been relatively modest. And there are at least three reasons that a more massive Chinese sell-off of Treasuries is exceedingly unlikely.