as the article says, they try to keep the yuan up. so they sell treasuries and buy yuan with the usd from the sales. (what they then do with the yuan doesnt matter, its theirs anyway)
1. Who is selling the CNY for USD? Specifically is it another arm of the government?
2. More importantly: what is the new holder USD allowed to do with their newly acquired USD cash pile? Are they allowed to transfer it out of the country? Or are they required to keep it in USD, but it in Chinese banks? Are their restrictions on what they can buy?
i m guessing currency traders, who sees a good deal selling their CNY for USD for more than they purchased the CNY prior.
https://en.wikipedia.org/wiki/Foreign_exchange_market
If so, anyone could be on the other side of the trade, including other governments, banks, speculators, investors, and businesses. The USD are transferred to the other party, out of China if appropriate.