Re:China's Subprime Crisis Is Here
by snowwrestler on Wednesday February 17, 2016 @04:42PM
(#11121665)
A struggling economy is when demand for U.S. Treasuries is the highest, because people flee to safety in troubled times, and financial instruments don't get much safer than U.S. Treasuries. There would be no shortage of buyers if China decided to sell off in a struggling economy.
China chose to put their own wealth into U.S. Treasuries, and therefore China will do everything it can to ensure that it can extract at least that much wealth out of U.S. Treasuries. They don't have a $1 trillion of free money that they can burn up just to hurt the U.S. by selling low. They need that money back!
The amount of U.S. debt held by China is often viewed as a negative thing, but it actually does a lot to stabilize our relationship with them. They want us to succeed financially, so that they can get their money paid back, and so that they have a place to sell the products they make.
Strong economic ties are the major reason we do not have a Cold War with China the way we did with Russia. Neither country wants to change that.
Edit to add: This is why there is so much U.S. reporting on China's economy. Not because Americans want it to fail, but because Americans want it to succeed, and have concerns.
China chose to put their own wealth into U.S. Treasuries, and therefore China will do everything it can to ensure that it can extract at least that much wealth out of U.S. Treasuries. They don't have a $1 trillion of free money that they can burn up just to hurt the U.S. by selling low. They need that money back!
The amount of U.S. debt held by China is often viewed as a negative thing, but it actually does a lot to stabilize our relationship with them. They want us to succeed financially, so that they can get their money paid back, and so that they have a place to sell the products they make.
Strong economic ties are the major reason we do not have a Cold War with China the way we did with Russia. Neither country wants to change that.
Edit to add: This is why there is so much U.S. reporting on China's economy. Not because Americans want it to fail, but because Americans want it to succeed, and have concerns.