China is already in a slowdown that cannot likely be reversed. They have an aging population due to the one child law. Unlike America China got old before they got rich. They invested a huge amount of their wealth building ghost cities that are sitting empty and deteriorating. There is no country in the world that can go head to head with the US on a level field.
If the Chinese divest themselves of the $1.2 trillion or so of US treasuries where will they invest? $1.2 trillion is a drop in the bucket of our debt.
Manufacturers are fleeing china right now to return to the US and places like viet nam. So now we will buy from viet nam. It will not destroy the US. We have 70% personal consumption in this country.
Hong Kong has become the test case of how much pain China will absorb to have total control. Hong Kong is the important financial channel for China. This is worth watching, I think it will show China’s policy to deal with problems.