Treasury bonds are largely misunderstood as “borrowing”, meaning we use their procedes for spending. This works well for anyone who isn’t the monopoly issuer of US dollars but doesn’t have the same meaning for Treasury, who is the monopoly issuer of dollars and has no need for revenue.

Treasury bonds are simply a different form of money that swaps liquid reserves (cash) for interest-bearing promissory notes. Since they require excess reserves to purchase they are never a “funding” operation for Treasury. Their purpose was only to allow Congress to anticipate tax revenue and spend into that policy space when we used the gold standard. The various maturity times of bonds reflect the time projected for the payout of spending/investments. Sans a gold reserve to defend, bonds have no real purpose except as welfare for banks and large investors.

China purchases bonds because they have excess reserves from their trade with us, not from any strategic purpose. Dollars never leave the Federal Reserve system, so their choices are limited to earning interest or not. Bonds neither know or care who owns them. They simply reflect the interest target, more or less, set by the Fed and remove currency from circulation for a set period of time.

All sales of bonds are zero-sum to Treasury because each seller needs a buyer to complete a transaction and has no impact on future sales by Treasury. There is no finite supply of dollars involved because the Fed shares a balance sheet with Treasury, so it will always be the gorilla in the room, able to purchase any amount of debt at zero cost. Trade wars and tariffs are the product of politicians not understanding our system and distracting the public from their ignorance or grandstanding.