Group 1 - In May, China reduced its holdings of US Treasury bonds by only $900 million, a significant decrease compared to reductions of $18.9 billion in March and $8.2 billion in April, bringing total holdings down to $756.3 billion [1] - China's holdings of US Treasuries account for only 2.1% of the total US debt of $36 trillion, which is insufficient to impact the US Treasury market significantly [1] - The reduction in US Treasury holdings is closely linked to the political dynamics between China and the US, with the current strategy aimed at maintaining leverage in negotiations on critical issues [1][2] Group 2 - The US debt, while substantial at $37 trillion, is primarily held domestically, with 76% owned by US entities such as the Federal Reserve and Social Security funds [2] - A drastic sell-off of US Treasuries could lead to inflationary pressures and negatively affect China's exports to the US, which constitute 15% of its foreign trade [2] - The decision to hold or sell US Treasuries is a complex calculation made by national financial strategists, rather than a simple trading strategy [2][3]