“Those who can diversify out of US debt are likely to do so”, but who can?

“Those who can diversify out of US debt are likely to do so”

But whither? As you say China may be on track to become holder of a reserve currency, but is far, far from there.

We’ve seen almost 70 years of US hegemony, a time during which the world internationalized like never before and the modern definition of reserve currency took shape. A meaningful reserve currency in this day and age must uphold the basic tenets of the international order. Which also means that it must be able to use the hard power required. Syria really is a poor choice of venues for US hard power; the more vital ones are the various shipping lanes that allow for bulk transport between global markets. The US fully controls global shipping.

China does not have the means to project power globally in a meaningful way. China too depends on the US fleets. And that US ability more than anything else is what underwrites its status as reserve. China until recently did not have a single carrier and now operates one purchased from the Ukraine which serves little purpose beyond training. the US and its allies operate well over 25.

The US can squander its standing in the fashion demonstrated but not really its status, there is no other alternative.