China owns a ton of US treasuries. It will sell some of those in exchange for dollars. It will then buy it's own currency, the Yuan, with those dollars.
Selling treasuries will make US bond prices go down.
Buying Yuan will increase it's price versus the dollar.
So, this is a move by China to prop up the value of it's currency.
...correct in a normal world. China is not normal. Their currency is pegged to the dollar. They are trying to decouple (see IMF comments delaying their inclusion for another year). They are lowering the peg which is increasing the dollar vs. ren. This in effect is lowering/devaluing the ren. which makes manufacturing cheaper there. Other emerging markets are also decoupling so that they can devalue their currency in order to keep up with the Chinese active devaluation. Currently other major markets Germany, Japan, etc. are not actively devaluing. If they do we will have a currency war. This would be very very bad.
...this article is only describing one aspect of a very complex picture right now. One that you could argue has not been seen previously. That and the weird illiquidity problem that happened Monday with ETFs. It makes for a very odd picture right now.
Selling treasuries will make US bond prices go down.
Buying Yuan will increase it's price versus the dollar.
So, this is a move by China to prop up the value of it's currency.