Last I heard China holds $1.3 trillion in US Treasuries.
The biggest problem is, if they cash in that debt, several things happen. First is that we have to “print” the money to pay them. That devalues the dollar further. Second, they could make a statement of lack of confidence in the dollar, which would reduce our national credit rating. (They have already made unofficial statements to that effect, reducing or ceasing investments in the dollar.)
That could result in other countries following suit. If that happens with multiple countries, it affects the confidence of domestic investors. So domestic investors cash in Treasury holdings and/or stop investments. So it results in a downward spiral. Some economists expect Saudi Arabia to cash in most or all of their Treasuries sometime this year. That is why the big visit by the Saudis this week. (Notice how that is not mentioned by the media.)
Future investors could demand collateral, meaning the gold supply. The gold supply cannot be used as collateral because it is already collateral for existing debt. Our gold supply’s unofficial estimated value is around $11 trillion, so not enough to balance the debt.
Where would it go after that? Good question.