4 ms·

I'm not so sure about that. China has brought a lot of US debt https://www.ey.com/en_cn/china-overseas-investment-network/overview-of-china-outbound-investment-

• syzarian 4y ago
  I don’t see how China buying U.S. debt would lead to more inbound foreign capital into China. Can you elaborate on this?
• enkid 4y ago
  Wouldn't that be Chinese capital investing in the US?
• drumhead 4y ago
  Thats because they need to put their export earning somewhere and US govt debt is the safest place to put it.
• ChatGTP 4y ago
  They bought US debt because they are confident the US will pay it off, it’s a ROI? Not to attract capital…
  • fuoqi 4y ago
    No. They bought it because the excess capital produced by artificially low exchange rate used to stimulate domestic production and exports is too big to be parked anywhere else.
    • ChatGTP 4y ago
      They didn't think it would lose money though, right?
      • fuoqi 4y ago
        With negative real interest rates they DO lose purchasing power and I think they thought about such risk. But making China a production powerhouse and technology transfer associated with it was a much more important goal.
• vishnugupta 4y ago
  China has run a persistent trade surplus with the US [1] so naturally it's accumulated a lot of USD, about $3T [2]. And there's only one place to keep that much money safely which is US Treasury i.e., lend it back to the US. [1] https://www.census.gov/foreign-trade/balance/c5700.html https://www.census.gov/foreign-trade/balance/c5700.html [2] https://tradingeconomics.com/china/foreign-exchange-reserves https://tradingeconomics.com/china/foreign-exchange-reserves