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That's one thing. Also, China is no longer buying US treasuries, which for a long time contributed to reducing US inflation via underpriced imports.
by jbay808 5y ago
That's one thing. Also, China is no longer buying US treasuries, which for a long time contributed to reducing US inflation via underpriced imports.
- melony 5y agoSo what are they doing with the extra US dollars now?
- jbay808 5y agoBuying oil, I think. And perhaps saving some for Evergrande's rainy day.
- nostrademons 5y agoBelt and Road Initiative: https://en.wikipedia.org/wiki/Belt_and_Road_Initiative https://en.wikipedia.org/wiki/Belt_and_Road_Initiative Basically, they're using it to buy American heavy equipment and build infrastructure in developing nations, principally in Africa and Central Asia. They lease the infrastructure back to the host country for cash (i.e. favorable terms of trade), and if the host country defaults, there's a clause that China can take over the infrastructure. They may have similar clauses in case of military action, though in that case, it kinda doesn't matter what the law or contract says. It's China's version of the petrodollar-for-military-bases system. When you run a trade surplus, use that to build up infrastructure that you can take advantage of in geopolitical conflicts. Colonialism never really went away, it just got more refined.
- GreenWatermelon 5y agoThis also contributes to increasing China's global influence, which means reducing the US's. Proxy economic war, rather than colonialism, imo.
- rsj_hn 5y ago> China's version of the petrodollar-for-military-bases system What do you mean when you say "petrodollar for military basis system"? Before you answer, please remember that a petrodollar is the analogue of a eurodollar -- it refers to dollar assets owned by petroleum exporting states, namely OPEC.