3 ms·
> I wonder if China could afford a trade boycott against the US. Also, doesn't it own tons of US bonds? What if it had a fire sale on them? How would that affec
by ac29 7y ago
> I wonder if China could afford a trade boycott against the US. Also, doesn't it own tons of US bonds? What if it had a fire sale on them? How would that affect the US?
Most people overestimate this. Of the $22T US Debt, only $6T is held by all foreign accounts combined, $1T of which is held by China. The majority of US Debt is held domestically.
https://en.wikipedia.org/wiki/National_debt_of_the_United_States https://en.wikipedia.org/wiki/National_debt_of_the_United_St...
- manacit 7y agoIndeed, the bond market is liquid and deep. If China wanted to dump the Treasuries they own, the US could easily opt to buy them back to prop the price up as a method of last resort, which would likely not have a huge impact. It would probably hurt them in the long term if anything - weakening the dollar makes their export-driven economy more expensive, ultimately stifling growth.
- mirimir 7y agoOK, that's good news. But hey, I live in the US. Most everything in big-box stores is made in China. I can't quite imagine how China could just cut off exports to the US. But maybe they have a slush fund. And I certainly can't imagine how the US could function without stuff from China. Who could fill the gap? I was in the US during the 70s oil boycott. Gas lines. Oil too expensive to stay warm in the winter. It sucked.