Then the yuan appreciates against the USD, and China's imports like oil, iron ore, and soybeans become crushingly expensive.
Bass seems to think that the reserves have already been spent through other accounts.
The reason China cannot match the US in tit-for-tat tariffs
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Then the yuan appreciates against the USD, and China's imports like oil, iron ore, and soybeans become crushingly expensive.
Bass seems to think that the reserves have already been spent through other accounts.
The thread title is wishful one-way thinking.
All China needs to do is stop buying US treasury and that will wreck the US and world economy. Much of the China to US trade surplus has been used to buy US treasury, essentially financing the US government and consumers.
With the trade surplus gone, the cheap financing is gone with it. Just look at how the market did upon Fed’s talk of raising interest rate.
This can turn out to be a black swan shock.
All China needs to do is stop buying US treasury and that will wreck the US and world economy. Much of the China to US trade surplus has been used to buy US treasury, essentially financing the US government and consumers.
With the trade surplus gone, the cheap financing is gone with it. Just look at how the market did upon Fed’s talk of raising interest rate.
This can turn out to be a black swan shock.
Yeah, I don't think China makes much money off exports. Most components like iphones are built in other nations and sent to China just for factory assembly. China only markups a bit for labor charges. On Apple iphones, you have LCD screens and processors from South Korea. Chips from USA. Cameras from Japan. Accelerators from Germany. Gyroscope from Switzerland.
Now USA blames China for massive deficits. I don't think the accounting make any senses. The deficit blame should be squarely placed at wherever the country the components originated from, not China. US allies fully know that. They rather keep silent about it. That is why no ones want to come out and challenge China. So they can get away from it.
I don't think China really care if everyone stop making products there. China doesn't really lose much. They have a huge internal domestical markets to grow.
Also I find it strange that no ones speak about China tourists and students bringing about $38 billion USD and $13 billion USD respectively to US economy last year. It is projected to be more than $120 billions annually by year 2022. It is not a small number considered travel and tourism industry is about 10% of US GDP.
Meanwhile Trump's base are the ones disproportionately impacted by not being able to export their crops and facing stiff increases in prices for basic consumer goods. The folks in Silicon Valley are going to be just fine regardless, and ironically they're the ones standing against this idiocy while the MAGA crowd cheers and throws up their red hats made in China. This just may end up being a self-correcting problem, just painful to watch and entirely unnecessary.
It seems many ordinary Americans are not unlike Trump in failing to understand how trade impacts on their economy and their life. Until it's too late and they take a hit and rethink their ideas. Or even worse they complain about the results and blame the wrong people and policies.
This misses the point, while technically correct it's entirely irrelevant. You don't have to kill an opponents entire population to convince them that a pointless war should be stopped, generally for the U.S. a few thousand will do. Remember China themselves experienced this in 1954 and may have learned the lesson better than our own neocons. You don't have to empty every shelf at Walmart and put every soybean farmer out of business before the people in the U.S. start to ask "Remind us why the fuck we're doing this again"?
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