🚨🇨🇳🇺🇸 CHINA'S ECONOMIC NUCLEAR OPTION China holds $761 billion in US treasury bonds. If Beijing decides to sell them, it could trigger a financial earthquake in the US. But will they push the button? Unroll: 👇 (1/5)
(2/5) WHY DOES CHINA HOLD SO MUCH US DEBT? 🇨🇳💵 “It’s just a function of their massive trade surplus with the United States,” says Tom Luongo, financial and geopolitical analyst. China recycles trade dollars into US Treasuries, managing currency risks and stabilizing their economy.
(3/5) TO SELL OR NOT TO SELL? 🤔 While Beijing has reduced its holdings before, Luongo argues, “China’s not going to dump the treasury bonds.” Selling them would drive up the yuan, hurting their exports. Instead, China has been using the dollars to bolster trade in Southeast Asia.
(4/5) CHINA DE-DOLLARIZES 🔄 “It’s a slow but sure way of binding trade partners closer,” Luongo says China is offering bonds in yuan to countries like Malaysia and Thailand, moving away from the dollar.
(5/5) THE REAL DANGER: EUROPE 😬 Luongo’s biggest worry? “Europe is the real problem.” He fears Brussels could trigger a financial crisis, using Ukraine as cover to remake their financial system—think debt defaults and a digital euro.
