If the Fed introduces negative interest rates, the Chinese will be paying us to hold their money.
If the Fed introduces negative interest rates, the Chinese will be paying us to hold their money.
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They would unload all their treasury holdings faster than you can say NIRP. And no country would be willing to finance our exploding debt.
China is just trying to hold on to dollars and hold on to a cheap Yuan. They have tried to buy all the oil and copper and gold. They have tried to buy land and bonds. (The land owned by the Chinese is owned by rich Chinese not the actual government).
China will be in the driver’s seat only when their economy becomes the worlds biggest buyer. If they surpass us as a consumer, even of their own goods, then they will be the dog and we will be the tail. Until then, they are holding on for dear life. Mexico and Indonesia and Korea are happy to make anything we want to buy.
Many of you are getting somethings wrong. China is not out to get the US. They are competitive with us. But they hate Japan. One reason Japan can never get their Yen down, is because China is happy to make the Japanese Yen to valuable. Chinese are happy to destroy the Japanese economy in favor of ours or theirs.