Hong Kong's South China Morning Post reports that China's retaliatory card against the US "tariff bomb" is selling the US Treasury and devaluing the yuan.
At present, China is the world's largest US Treasury with tremendous US Treasury bonds worth $ 11.32 billion.
If China sells a large amount of US Treasury bonds, it could lead to a slump in government bond prices and rising interest rates, as well as a recession in the US economy.
However, it is pointed out that it is difficult to implement because there is no other investment asset to replace US Treasury Bonds and the dollar is needed to defend the yuan value.
The most effective card is the depreciation of the yuan.
If the value of the yuan is depreciated, the cost competitiveness of Chinese exports will be revived, which can offset some of the US tariff bombing effect.
In addition, the US agricultural retaliation tariff, delayed opening of the Chinese financial market, and boycott of US products are also referred to as China's retaliatory card, the media reported.
"China, the sale of US Treasury bonds with a retaliatory card, the defeat of the yuan"
2019-05-12T19:51:17.580Z
Hong Kong's South China Morning Post reports that China's retaliatory card against the US "tariff bomb" is selling the US Treasury and devaluing the yuan. At present, China is the world's largest US Treasury with tremendous US Treasury bonds worth $ 11.32 billion.
Source: sbskr