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If China takes that action the US can cancel China's bonds. I don't think either side wants to take such drastic action though.
by Canada 7y ago
If China takes that action the US can cancel China's bonds.
I don't think either side wants to take such drastic action though.
- sgift 7y agoIf the US cancels Chinas bonds the US looses any trust, i.e. everyone has to assume that their bonds are worthless. No sane person/company would lend the US money in that scenario.
- Canada 7y agoAnd if China nationalizes US technology nobody will trust it either. No sane company would invest there in that scenario. I think whoever takes drastic action first would lose trust of third parties. Anyway, I don't think it's going to go that far, too much collateral damage.