Big foreign buyers are backing away from US government debt, which is bad news for Washington's borrowing costs and good news for China.

• Norway's sovereign wealth fund, the world's largest, wants to cut its US Treasury holdings by roughly a third and buy Japanese and corporate bonds instead.
• The worry is simple: if inflation stays hot and the Fed raises rates, the value of those bonds falls hard.
• Holding US debt no longer buys goodwill — Canada is the fifth-largest holder of Treasuries and still faces tariff threats, and China propped up the US system in 2008 and got a trade war for it.
• China is winning the other side of this trade: its currency has gained against the dollar, its bond values are rising, and borrowing there costs a fraction of what it does in dollars.
• The US economy is behaving strangely — a strong jobs report pushed both stocks and bonds down, because good news now means higher rates.

Outlook: Beijing is set to issue a wave of new government bonds, competing for the same global money the US needs to fund itself.