On July 5, 2025, President Donald Trump signed into law what he dubbed the “Big & Beautiful Bill,” a sweeping legislative package aimed at confronting what he called “China’s financial warfare against America,” a signature political flourish attached to what may become a turning point in the US-China financial relations.
While the bill does not directly authorize the freezing of Chinese assets, it coincides with broader legislative momentum in Washington, such as the Chinese Currency Accountability Act of 2025 and the China Financial Threat Mitigation Act of 2025.
These efforts empower the US Treasury to seize or freeze Chinese foreign exchange reserves in case of national security threats, pandemic reparations or Taiwan-related aggression.
The legislation, tied to Trump’s broader push to hold China “accountable” for global disruption, is a seismic move with implications for over US$800 billion in Chinese reserves and decades of global financial norms.
Its passage has intensified concerns in Beijing that the US may be inching closer to weaponizing the dollar and financial infrastructure against the world’s second-largest economy.
Yet despite the gravity of the moment, the Chinese government has remained notably silent since the bill was signed. There has been no statement or protest from the Ministry of Foreign Affairs, nor a fiery editorial in the state-run Global Times or Xinhua News Agency. Nor have they been any data updates or renminbi (RMB) adjustment comments from the People’s Bank of China linked to the bill.
Compared with past patterns, even symbolic US sanctions provoke a loud rebuttal from Beijing. This time, though, there is conspicuous silence for a government typically quick to denounce perceived affronts to its sovereignty. The official silence surrounding a move that could potentially freeze China’s foreign exchange reserves is not an oversight, but a deliberate strategy.
Threat without a trigger
While the July 5 legislation falls short of authorizing outright asset seizure, its symbolic weight—and the cumulative direction of US financial policy—has not gone unnoticed in Beijing.
Trump administration officials have framed the legislation as a necessary step to “defend America’s economic sovereignty,” referencing China’s currency practices, data flows and alleged “covert economic warfare.”
The accompanying bills are more explicit: the Currency Accountability Act seeks new reporting mechanisms and penalties for perceived exchange rate manipulation, while the Financial Threat Mitigation Act calls for contingency planning in the event of Chinese financial coercion, including stress-testing the implications of decoupling or asset freezes.
Although there is no “smoking gun” provision for freezing China’s foreign reserves, the message is clear: the US is actively positioning itself to respond financially to a crisis over Taiwan, cyber intrusions or other strategic flashpoints.
In Beijing’s view, this opens a dangerous door—Washington is clearly escalating pressure on Beijing’s global financial influence. In turn, China’s silence to the threat
Five forms of strategic silence
1. Containment Over Confrontation
Given the Trump administration’s preference for public clashes, in the Chinese policymakers’ view a vocal rebuttal would only fuel Trump’s confrontational narrative that China is an existential threat.
In his second term, Trump is portraying China as both a geopolitical rival and a domestic political target. Beijing may assess that open retaliation would justify the US escalation, including via further economic “decoupling” or sanctions.
Engaging in a tit-for-tat war of words could risk escalation—both rhetorical and financial. Beijing appears to be opting for containment over confrontation, betting that silence is a way to avoid validating the bill’s political utility.
Quietly engaging allies behind the scenes—especially in the Global South and Europe—may be seen as more effective than shouting into Trump’s echo chamber.
2. Preserving Financial Market Stability
Holding over $800 billion in US Treasuries, as such dollar-denominated assets, might now be viewed as a vulnerability rather than a security. However, publicly acknowledging the risk to dollar-denominated reserves could trigger unintended consequences—such as capital outflows, RMB depreciation or investor panic.
The Chinese leadership has long prioritized financial stability as a pillar of social and political order. An explicit Chinese protest could trigger turbulence in the RMB, capital markets or foreign exchange flows.
With youth unemployment high and domestic economic recovery still fragile, Beijing has every incentive to keep markets calm. Remaining quiet buys time and avoids spooking global markets that are already jittery amid renewed tensions between the US and China. Public acknowledgment of the bill’s implications might cause more harm than good, at least in the short term.
3. Controlling the Narrative at Home
Domestically, visible panic would be politically costly; the Chinese Communist Party (CCP) remains highly sensitive to perceptions of weakness. In Xi’s China, to acknowledge vulnerability is to question the supremacy of CCP control. The government is tightly controlling economic messaging amid slowing growth, record-high youth unemployment, and concerns about local government debt.
Acknowledging that the United States might target Chinese financial assets would undermine the state’s narrative of stability, sovereignty and competence. For Beijing, saying nothing avoids sending the wrong message to its own citizens.
4. Silent Realignment in Progress
China’s silence does not mean inaction, but rather is a form of diplomacy. Beijing can present itself as the more restrained actor, in contrast to an increasingly erratic Washington.
By not reacting immediately, China avoids alienating other countries—particularly in the Global South and Europe—who may share concerns about the politicization of global finance. In recent years, Beijing has actively reduced its exposure to the US dollar through de-dollarization, increasing its store of gold reserves, and expanding cross-border RMB settlements.
It is also hedging by deepening bilateral swap lines, investing in digital currency infrastructure and exploring alternatives to the SWIFT system. These are not reactions—they are preparations. A China-US tit-for-tat may still come, but Beijing wants it to be controlled, asymmetrical and possibly delayed.
5. Signaling to Global Audiences- Time to Recalibrate
If the dollar’s role as a reserve currency is no longer “neutral”, all will watch closely how China reacts before considering their own exposure. By remaining measured, China presents itself as the mature actor—especially to emerging economies and non-aligned states.
The contrast between an aggressive Washington and a composed Beijing may help China win diplomatic ground among countries wary of the US’s politicization of the global financial system.
Perhaps most importantly, silence gives China space to act behind the scenes in pushing ahead with de-dollarization. The July 5 legislation likely reinforced that trajectory. The next move may not be announced in headlines, but rather in gradual, structural shifts.
A doomsday scenario
To be clear, a full-scale freeze of China’s US-based assets or exclusion from SWIFT remains unlikely. Such actions would reverberate through the global financial system, damaging not only China’s economic interests but also US credibility as the steward of the world’s reserve currency.
It would set a precedent that even the US allies would find unnerving. In this sense, the so-called “doomsday scenario”—complete Chinese asset seizure or removal from SWIFT—remains unlikely.
Yet the risk calculus in Beijing is no longer based solely on likelihood. Trump has already defied expectations before. In his second term, buoyed by a loyalist Congress, armed with a legislative mandate plus a politicized Treasury, and a post-Ukraine global precedent for asset seizures, the possibility of financial brinkmanship can no longer be dismissed.
Beijing is not only watching what Washington does—but also how the US courts reinterpret the limits of executive power under perceived emergencies. In Mason v. United States of America (2023), the Supreme Court upheld broad authority for the executive branch to freeze or reallocate foreign-held assets tied to adversarial states, even absent direct hostilities.
While the case involved Iranian assets, the court’s ruling effectively lowered the threshold for asset seizure on grounds of national security. The ruling signaled a shift toward greater legal latitude for financial coercion under US law.
For Chinese policymakers, Manson underscores a deeper concern: that the legal and institutional safeguards once moderating US financial actions are eroding. The risk of precedent-enabled overreach is no longer theoretical.
From Russia’s reserve freeze to Venezuela’s blocked accounts, Beijing sees a pattern—the unthinkable is now merely implausible, not impossible, and is preparing accordingly. As a result of these concerns, Beijing is taking active steps to mitigate risk by protecting itself from potential US financial pressure.
These include strengthening its financial system, increasing domestic consumption, expanding the use of its own currency in international trade, diversifying its foreign exchange reserves, including increasing its gold holdings and exploring alternatives to the dollar-centric global financial system.
What the silence reveals
The Chinese government’s non-reaction is not a sign of confusion or paralysis—it is a disciplined move with a calculated approach. By choosing not to retaliate publicly, Beijing maintains strategic flexibility. It keeps markets calm, retains diplomatic maneuverability and avoids giving Trump the satisfaction of a public spat.
For Washington, the silence should not be mistaken for complacency; the long-term implications are profound. In Beijing’s strategic playbook, stillness is often the opening move, not the endgame.
It reacts to Trump’s policies with a mix of defiance, strategic counterpunches and diplomatic maneuvering, ultimately weathering the storm without major economic collapse. While headlines focus on Trump’s bombast and Beijing’s stillness, the real shift may be structural: an acceleration in China’s quest to insulate itself from Western financial leverage and a weakening of the dollar’s uncontested supremacy.
China is already adapting its financial posture to reduce reliance on the US-dominated system. Over time, this quiet recalibration may do more to undermine American financial power than any headline-grabbing confrontation.
The risk is not that China reacts now, but that it quietly and slowly restructures its entire financial strategy, with long-term and negative consequences for the US-led financial order. The question now is not whether China will retaliate, but how subtly and how soon.
