In fact, January was the sixth month in a row in which Chinese holdings of U.S. Treasuries fell…

China continued to cut its holdings of US Treasuries at the beginning of the year amid rising long-term interest rates, which slashed its returns on its overseas investments after the US Federal Reserve accelerated its lending cost increases last year.

As foreign holdings rose for a third straight month in January, China's holdings slid to US$859.4 billion in January from US$867.1 billion in December, declining for the sixth straight month and marking their lowest point since May 2009, according to data released by the US Department of the Treasury on Wednesday.

The good news is that the Chinese have been selling off their holdings at a measured pace.

If a blockade or an invasion was imminent, I would expect the Chinese to start selling off Treasuries much more rapidly.

We will keep watching to see if the pace changes.

Meanwhile, CBS News is reporting that China just completed "three days of military drills meant to simulate a blockade of Taiwan"…