A quick Google search on this topic gives me an estimated 30bps, or 0.30% increase in US10Y yield, should China choose to dump all its holdings (https://www.cfr.org/blog/what-would-happen-if-china-started-selling-its-treasury-portfolio). Given that the U.S. economy is still growing faster than even the simulated interest rate, the scenario does not sound like a huge deal.

On the other hand, have people considered what would happen to the PBOC balance sheet if China started to dump treasuries? What assets would they buy? Oil? Gold? Bitcoin?