During the two-party struggle between the United States and China, China released a big trick to sell $ 25.7 billion in U.S. debt, Trump felt bad, warned the Democratic Party that the U.S. government would close?
In the first half of this year, the US-China tariff war, the Chinese side came up with tariff counter, rare-earth export control and reduction of U.S. soybeans imports and other measures, so that U.S. President Trump was not quick. In addition to these obvious means, China has a "big trick", which is to sell U.S. debt. According to the data of the U.S. Treasury Department, in the first seven months of this year, China cumulatively sold U.S. debt $5.37 billion, in July this year, China sold U.S. debt $257 billion in a breath, the total amount of U.S. debt currently held by China is only $7307 billion, making the lowest in the last 16 years.
As is well known, the biggest feature of the U.S. economy is "loan new and old", through the issuance of U.S. debt, using its own economy size and military strength to recruit funds to the world, the total amount of U.S. debt has now exceeded $37 trillion.
Due to the security and high yield of U.S. bonds, the central banks of many countries also hold a lot of U.S. bonds, while U.S. bonds are a liquid non-secret bond, can flow in the international market, so selling U.S. bonds is not a new thing. But there are exceptions to everything, if the main holders of U.S. bonds sell a lot, it will inevitably exacerbate the international market panic, fear of becoming a "receiver man", so without caution there will be a "selling tide", when U.S. bonds lose international trust, the main source of U.S. income is also broken, the dollar hegemony is also the possibility of collapse.
China is the third largest overseas creditor of the United States in addition to Japan and the United Kingdom, and the sale of U.S. bonds is easy for other countries to worry, which is also a situation that the U.S. does not want to see. On the other hand, since the US President Trump came to power, the U.S. Federal Reserve has been pressured to reduce interest rates several times, and even promised to let U.S. Federal Reserve President Powell resign, leading to the U.S. Federal Reserve's independence to be dubbed, which will cause the dollar credit to be damaged, China's reduction of U.S. debt, not excluding the possibility of suspicion about the security of U.S. assets. The consequences of this are that the U.S. will have to increase the yield of U.S
On September 20, local time, Trump issued a warning, saying that the United States is likely to "shut down" due to the US Democratic and Republican budget talks, and Trump also gave a specific time, before October 1, this year.
What Trump said is true. The budget of the U.S. federal government will be exhausted on September 30th. Although the U.S. House of Representatives has passed a seven-week temporary appropriation bill to allow the Trump administration to last until November 21st this year, the bill was stopped in the Senate with 44 consent and 48 opposition. Then things are very embarrassing. If the U.S. government shuts down and doesn't talk about international affairs, there will be "chaos" within the United States. As a country with legal guns, what will happen to the United States if the American police don't go to work? The "zero yuan purchase" event is likely to be staged in batches.
In this context, China's selling of U.S. debt is worse for the United States. The United States should think about what it has done recently. If the United States stops unilateral sanctions against China and stops making waves on the Taiwan Province issue and the South China Sea issue, China will naturally not dismantle the United States. Trump's global tax increase seems to be in the limelight, but it is actually asking for trouble.
In summary, there are many "cards" of the Chinese side, selling U.S. bonds is one of them, choosing to sell U.S. bonds, indicating that the Chinese side in the "battlefield" of the U.S. game, is shifting from the economic and technological field to the financial field, which is the reflection of national confidence.
For the United States, borrowing money is not a way. It is wise to find a sustainable development path. If the United States wants to stimulate the economy and develop industry, China is the best partner. China pursues a foreign policy of mutual respect, mutual benefit and win-win. As long as the US speaks, China will probably give this face on the premise that it is in line with its own interests. So is Trump ready?