China, with significant trade surpluses, particularly with the United States and Europe, is accumulating vast amounts of foreign currencies like dollars and euros. Instead of traditionally reinvesting these funds in the countries they trade with, China is selling off US Treasury bonds, even at a loss, and withdrawing these funds from American and European banks. The source argues that China is not simply "dumping" currency but is strategically transferring these reserves into their own banking system and building alternative financial infrastructure, potentially involving other surplus nations, to avoid the risk of having their assets frozen or seized, a lesson potentially learned from recent international events. This shift allows China to control the flow of these currencies and potentially facilitate international transactions outside the established Western financial system.