Either the People's Republic of China is the successor state to Nationalist China, in which case it must honor the latter's debts, or it isn't, in which case it is not the legitimate government of the country.
While a rich nation can indeed borrow a huge amount of money and has a lot of assets to sell off, this doesn't mean Santa has installed an ATM on every street corner. Which is what a lot of people seem to think.
The proposed reform involves rolling people's 401(k) savings into directed distribution plans unless they elect not to participate. This probably sounds like a reasonable idea until you dig beneath the surface.
As a comedian, I have had to deal with my share of debt collectors in the past so I wanted to offer some advice to President Obama on how to best avoid China if they start trying to collect their trillion dollars...