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CHINA CAN BANKRUPT THE USA!   [Copy link] 中文

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Post time 2014-1-19 22:11:24 |Display all floors
China owns record amount of US debt

China has increased its holding of US debt to a record amount of nearly $1.317 trillion, US government data released this week revealed.



China’s holding of US debt increased by 0.9 percent in November from $1.305 in October.


The 1.317 trillion figure exceeds Beijing’s previous record high in July 2011 of $1.315 trillion, according to the government data.


“Large interest-rate differential and steady appreciation of the renminbi contributed to large arbitrage inflows into China, a situation made all the more easy with China’s increasing financial integration and renminbi internationalization,” wrote UBS AG Hong Kong-based economist Wang Tao in a report on China’s data, according to Bloomberg News.

China had a total $3.82 trillion in foreign exchange reserves at the end of 2013.


The next closest foreign holder of US debt is Japan, which increased its holdings to $1.186 trillion in November from $1.174 trillion in October.

Overall foreign holdings of US debt increased by 1.1 percent to $5.72 trillion, marking the fourth straight month in which foreign purchases of US Treasury debt has risen.

Wang wrote China’s purchases could slow down in 2014, largely due to the US Federal Reserve’s decision to unwind its $75 billion bond-buying program.

China is widely believed to be a serious economic rival for America within the next several years. It became the world's largest trading nation in 2013, overtaking the US, which held the top position for much of the twentieth century.

The Asian country reported earlier this month that its total trade for 2013 reached $4.2 trillion, a sharp increase over the previous year.


China had already become the world's largest exporter of goods in 2009.


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Post time 2014-1-19 22:13:07 |Display all floors
Dimitri:

One of these days, they'll probably use such funds to buy out western owned factories, such as Apple. This is what America did to Britain during the latter part of the nineteenth century.

sheldon:

Pity China doesn't call in all the debt and bankrupt the USA overnight

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Post time 2014-1-19 22:50:39 |Display all floors
Reglin:

The U.S. economy is a house of cards destined to fall. China not only holds trillions of dollars in debt but also trillions of dollars worth of U.S. bonds. The amounts are staggering and the longer USA continues this practice of maintaining a parasitic borrow-and-loan economy, the harder it is for them to pull out. Poor Americans, someday soon you'll be on the streets rioting for food.

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Post time 2014-1-19 22:56:14 |Display all floors
Can a China-Russia Axis Bankrupt the US?

Russia and China have studied the end of the Cold War and how the US ultimately defeated the USSR by bankrupting it.

According to Chinese State Councilor Yang Jiechi and Secretary of the Security Council of the Russian Federation Nikolai Platonovich Patrushev, 2013 was “a year of harvest” for Sino-Russian relations. It was also a year of new lows for the countries’ relations with the West and from the look of it, things could get worse in 2014.

Much has been said in recent years about how two difficult wars in Iraq and Afghanistan and a sagging economy cut the U.S. at the knees and created space for China. During this same period, China was enjoying double-digit economic growth and a relatively stable security environment, emerging as a hegemon in Asia. As the U.S. was struggling to extricate itself from, and was pouring billions of dollars into, unwinnable wars, Beijing was reaping the benefits of its “peaceful rise” by building its economy, resolving longstanding territorial disputes with neighbors, consolidating ties with smaller powers within the region, and neutralizing Taiwan as a potential source of armed conflict.

Thus, when China began flexing its muscles in the East and South China Seas, Beijing was not cowed by the U.S. “pivot,” or “rebalancing,” to Asia. For one thing, it was apparent that Washington’s renewed interest in East Asia would not — at least not in the medium term — be accompanied by a willingness to allocate sufficient capital and resources to make the pivot a credible counter to China. As Beijing and many U.S. defense experts saw it, the rebalancing was more a wish list and academic exercise than an actual strategy, let alone one that was anywhere near implementation. That is the reason why Beijing suffered little consequences when it threatened to alter the status quo within the region, such as with the November 23 declaration of its extended Air Defense Identification Zone (ADIZ) in the East China Sea. (There is every reason to believe that a credible U.S. pivot to Asia would have deterred Beijing, which ostensibly does not seek war at this point in time, from embarking on such adventurism.)

Now by working together, China and Russia could make sure that the U.S. rebalance to Asia, if it ever materializes, remains a diluted, and therefore ineffective, affair. They could do so by enlarging the spatial scope of U.S. security responsibilities and further stretching its military’s diminished resources. A few years ago, Bobo Lo, an associate fellow at Chatham House, proposed the term “axis of convenience” to describe the relationship between China and Russia. Five years after the publication of his book of the same title, the relationship has never been more convenient. For the time being at least, Beijing and Moscow appear to have set their own territorial disputes aside, and by cooperating at the strategic level they are hoping to force the U.S. out of Asia altogether.

A substantial amount of attention has been paid to China’s Anti-Access/Area Denial (A2/AD) strategy, with the DF-21D anti-ship ballistic missile (ASBM) serving as one of its principal components, and to which we can now perhaps add the ADIZ. Less, however, has been said of Russia’s ongoing efforts to keep the U.S. out of its backyard. It is interesting to note that two weeks after China’s ADIZ announcement, Russian President Vladimir Putin, meeting top military officers, stated that Russia would bolster its presence in the potentially resource-rich Arctic. Earlier that month and a little more than a week after China sprung its ADIZ surprise, the Russian navy announced that the Arctic would be its priority in 2014. As The Diplomat reported earlier this month, Russia is currently deploying aerospace defense and electronic warfare units to the area, and is now building a comprehensive early-warning missile radar system near Vorkuta in the extreme north, among other developments.

The growing presence of the Russian military in the Arctic — which stands to turn into a region of strategic importance — will surely prompt a countervailing response from the U.S. (it has already indicated plans to increase its foothold in the region). However, doing so — let’s call it a “rebalancing to the Arctic” — would further strain the U.S. military budget and thereby take resources away from the “pivot” to Asia.

Simultaneously, the Russian military confirmed on December 16 that it had deployed nuclear-capable Iskander-M tactical ballistic missile systems, with a range of approximately 400km, into its Baltic exclave of Kaliningrad and along its border with NATO members Poland, Estonia, Latvia, and Lithuania. The news followed reports the previous weekend that satellite imagery had unveiled the presence of 10 such launchers in the exclave. Although President Putin denied the deployment on December 19, Russia has shown every indication that it seeks to expand its operations in its Western Military District, which aside from Kaliningrad also includes much of the European part of Russia.

There are questions over whether Washington can afford to substantially increase defense spending without bankrupting the country. It will find itself unable to counter both a resurgent China in East and Southeast Asia, where it has been speculated that China could eventually announce a second ADIZ, and a more muscular Russian presence in the Arctic and near the Baltic states. Either the U.S. will focus on one, or it will attempt to meet all contingencies, but do so with less-than optimal resources. With Washington feeling it has little choice but to choose the latter course of action, China and Russia will both benefit by confronting a diffuse and distracted opponent or succeed in breaking the U.S.’s back by forcing it to overspend — unless other countries like Japan and NATO members agree to greatly expand their defense spending, which appears unlikely. Furthermore, there are also doubts about whether the Japanese would agree to constitutional changes of the sort that would allow for military burden sharing of the type envisaged here.

Whether the U.S. has a “right” to be an actor in what Russia and China consider as their backyard is a question we’d better seek to answer elsewhere. But what is clear is that a weakened U.S., whose ability to meet the challenge of China’s “rise” is already very much in doubt, now seems on the brink of facing a multi-pronged challenge from a Sino-Russian axis that, if it is to be countered effectively, will require a number of “pivots.” Whether Russia’s economy can sustain a military expansion on the scale necessary to prompt a U.S. realignment is questionable, though the increasingly authoritarian nature of its leadership means that Moscow will be far less vulnerable than Washington to public discontent with huge defense spending in times of austerity.

Both Russia and China have closely studied the end of the Cold War and how the U.S. ultimately defeated the U.S.S.R. by bankrupting it. Two decades later, it looks like Moscow and Beijing are trying to return the favor.

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Post time 2014-1-19 23:31:08 |Display all floors
CHINA CAN BANKRUPT THE USA!


This is not true... $1.317trillion only amounts to about a little more than 7.6% of total US public debt, and it would certainly not be in China's best interests to even think about "bankrupting" America

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Post time 2014-1-20 09:11:45 |Display all floors
China uses its US debt to fund their own debt.  Selling off its US debt would cause their own interest rates to skyrocket an kill the Chinese bond market for states an citys to borrow on.   

Have you noticed how every month China talks about not increasing the amount of bonds they buy from the USA,  but every month you see China buying more an more?  That's China backing their own debt borrowing with US treasury bonds.  

Also you cant "call in" a treasury bond.  Bonds are sold with a time limit attached to the bond.  If you attempt to return it an get your money back, the bond will be repaid at a lesser amount then you paid for it.  

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Post time 2014-1-20 09:37:41 |Display all floors
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