U.S owes China $1.1 Trillion, what if U.S refuse to pay back?

[kankan326]

Big gain in short term and big loss in long term for US. Opposite for China.

 

[Jackdaws]

US should just derecognize Govt. Of China in Beijing and recognize the Govt of China in Taipei and owe them the money. So no default but it should go in the hands of a responsible regime.

 

[zectech]

Trump just said no default on bonds.

Because they want to pull manufacturing out of China first. Then sue every Chinese business in the West and BRI. Then default.

Better for China to respond now by dumping 1T in bonds (and deinvest from the West), and explain the virUS did not start in China.

https://www.sciencedirect.com/science/article/pii/S0924857920301643

If any lawsuits happen, nationalize every Western owned business in China in reply.

 

[Pyara9]

A countries credit rating works just like your personal credit rating..

If i don't pay my bills on time no lender will ever loan me any money.. it doesn't matter which lender i didn't pay. All lenders will say No.

So when a person doesn't pay his debt it's sold off for fraction of the cost to collection agencies. other countries in this case who want to take that risk..

In china's case it will sell that debt to other countries.

At the end no one will lend money to U.S again. Bad
reputation, recession, etc.. all the bad stuff will follow...

 

[xuxu1457]

Russia has almost sold out of US Treasury bonds.

 

[ohmrlobalobayeh]

Sure. Just dont do stupid crap for full 2 months or so (regarding corona information) with so much grievous economic damage in the end for everyone else (because you lied to them about it)...and you wont have to pay up. I think the precedent is fine from the US perspective.

Or simply dont enter the USD system to begin with. Your choice to enter (quite easily in China's case after cold war) in the end...and then indulge in it to the level of currency peg for extreme low price labour protection....at huge long term liability cost and vulnerability.

Tell me any other country that checks all these boxes?

Then ask why any other country would extrapolate that as a "potential" to themselves afterwards?

Please don't tell me somebody atually got convinced by this self opinion by the poster above - this is not how the world works.

 

[khansaheeb]

US should just derecognize Govt. Of China in Beijing and recognize the Govt of China in Taipei and owe them the money. So no default but it should go in the hands of a responsible regime.

If countries start de-recognising countries then the whole world order will crash. Imagine if Pakistan de-redcognises India and declares war on Gujarat and Bihar or refuses dialogue with India but maintains talks with Indian Punjab. Politics would get a whole lot complex.

 

[Jackdaws]

If countries start de-recognising countries then the whole world order will crash. Imagine if Pakistan de-redcognises India and declares war on Gujarat and Bihar or refuses dialogue with India but maintains talks with Indian Punjab. Politics would get a whole lot complex.

Except. Taiwan was recognized as the real China till the early 70s. Also Taiwan has a different regime in power. Not the case with Gujarat, Bihar or Punjab.

 

[Han Patriot]

US should just derecognize Govt. Of China in Beijing and recognize the Govt of China in Taipei and owe them the money. So no default but it should go in the hands of a responsible regime.

A trade war didn't do Jack shit jackdaws. We end up buying more beans.. Lolol

 

[Brainsucker]

Because they want to pull manufacturing out of China first. Then sue every Chinese business in the West and BRI. Then default.

Better for China to respond now by dumping 1T in bonds (and deinvest from the West), and explain the virUS did not start in China.

https://www.sciencedirect.com/science/article/pii/S0924857920301643

If any lawsuits happen, nationalize every Western owned business in China in reply.

I agree all except for nationalize every western owned business in China. It can hamper China's investment credibility in the future. For sell out 1T in bonds is a good strategy, while US is in big debt and selling bond right now. If China sell their 1T in bond, US will get problem in selling new bond.

China doesn't need to nationalize every western owned business in China. They need to take those US tycoons to move in China. Bringing more investment and money. Specially when US citizens hate those tycoons for their disloyalty to their own country. Look at Bill Gates, who got attacked by US people right now.

If China can bring them in, specially when those rich men think that China is more profitable than US, it will drain US economy more.

 

[Mk-313]

Wrong.

Read the full thread from this post on:

https://defence.pk/pdf/threads/sena...ebt-owed-to-china.663227/page-3#post-12277218

his answer doesnt even make sense. but in hindsight if US defaults on the debt the interest rate on the treasuries will go extremely high up because people will stop buying treasuries. the whole reason countries/comapnies/retirement funds buy US treasuries and give US loan is because US's guarantee is good as buying gold and on top of that you earn interest. and U.S's guarantee is backed by is its ever increasing tax revenues that always assures its lender that US has the ability to pay interest and their debt when their treasuries mature.

If US didnt increase its revenue proportional to the interest it will have to pay noone will lend US any money

To answer why china buys into it? china-america debt loop
China has a surplus with the US in trade which means that every year yuan should rise in value against the dollar which then means chinas labor will get expensive and hence its exports and hence other 3rd world countries will look attractive for exports. to counter this china starts buying US treasuries with the surplus to artificially increase the demand of the dollar and keep its yuan low . that is the "currency war/manipulating" US has been touting to hold china accountable to

the other effect this debt does is it gives more money in the pcokets of US consumers in the form of government spending or lower taxes which then translates to more money avaulable to buy chinese goods and this cycle continues

So the answer to you MAJOR question china doesn't do it to keep other 3rd world countries out of the competition and remain the manufacturing hub of the entire world