They would take a bath as the purchasing power of those dollars falls.
The real issue is, With what is Hagel warning the Chinese? Naval forces that undermanned, ill maintained and ill trained?
Another of Obama's "red lines" will simply cause China to become even more aggressive. He should shut up and request an additional $50 billion for the US Navy, which would say far more.
They can’t dump dollars: the Fed Reserve will simply print more to buy the T-Bills the ChiComs hold. They would take a bath as the purchasing power of those dollars falls.
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They had better not mess with us. We’re a money printing machine that can spew cash like volcanic ash clouds. lol