Selling dollars to counter US trade protectionism???

Selling dollars to counter US trade protectionism???
Aug 16, 2007 01:54
BBQQ Points: Join Date: Feb 7, 2007 Status: offline	In recent years, the trade disputes between China and US have occurred frequently, for example, such as IPR issue, the revaluation of RMB and the food safety. One of the reasons is that China has earned a large amount of trade surplus from its partner. This made US very uncomfortable. Thus, US has tried many ways to change the situation and protect its domestic indestries and corporations, for example, requesting China's Yuan to revaluate. Faced with these, what China will do? The report from Telegraph said that China may use its abundant foreign exchange reserve to counter the pressure from US. The volume of China's foreign exchange has exceeded 1.3 trillion yuan. Meanwhile, China has a vast holding of US dollars. To cope with US trade sanctions, China may liquidate the holding of US treasuries. Such a move may cause the dollar crash. Bush said that China will have a great loss if she really selll its dollar holdings. What do you think of it? China will liquidate her vast holding of US treasuries to counter the pressure from US?

Aug 16, 2007 01:54

BBQQ
Points:
Join Date: Feb 7, 2007
Status: offline

In recent years, the trade disputes between China and US have occurred frequently, for example, such as IPR issue, the revaluation of RMB and the food safety. One of the reasons is that China has earned a large amount of trade surplus from its partner. This made US very uncomfortable. Thus, US has tried many ways to change the situation and protect its domestic indestries and corporations, for example, requesting China's Yuan to revaluate. Faced with these, what China will do?

The report from Telegraph said that China may use its abundant foreign exchange reserve to counter the pressure from US. The volume of China's foreign exchange has exceeded 1.3 trillion yuan. Meanwhile, China has a vast holding of US dollars. To cope with US trade sanctions, China may liquidate the holding of US treasuries. Such a move may cause the dollar crash. Bush said that China will have a great loss if she really selll its dollar holdings.

What do you think of it? China will liquidate her vast holding of US treasuries to counter the pressure from US?

Aug 16, 2007 06:57

TRAVELLERMIKE
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Join Date: Mar 15, 2007
Status: Offline

All the world's economies are so closely interlinked that it is almost impossible to cause harm to any one of the major economies without the damage 'rebounding'. Take for example the latest impact of the high level of default on US home loans, and the way that has impacted stocks and shares the world over. So I suspect that though there will continue to be a lot of 'sabre-rattling' (threatening words) on this subject, there will be no actions taken that might risk real damage to either economy.

Aug 17, 2007 01:21

KATRINA
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Join Date: Nov 29, 2004
Status: Offline

"there will continue to be a lot of 'sabre-rattling' (threatening words) on this subject, there will be no actions taken that might risk real damage to either economy."

You are right, Travellermike. I read a piece of news which said that the author who wrote these threatening words on the Telegraph made up his story. It is fake. Meanwhile, China held press conference to expound this matter. China announced that she will not liquidate her vast holdings of US treasuries. Surprisingly, the report made by Telegraph has aroused too much attention from the world.

Aug 20, 2007 03:31	#3
JIMMYB Points: Join Date: Feb 7, 2007 Status: Offline	I believe that China will not do so. Otherwise, the whole world economies will be affected. It is no good for China itself.

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