To be less figurative about it, China's huge trade surplus gets used for many things. One of them is to buy the national debt of other countries. When they own enough of it, the yuan will become the reserve currency of the world. This is fine until recession hits the debtor country. Since their interest leaves the debtor economy for China, taxable GDP decreases making treasury bond issues more risky. China negotiates to buy assets in other countries in lieu of debt restructuring. At the very end of the process, China militarizes. End game - checkmate.
PS. Thanks for mentioning Kung Fu. He was a cool guy.
It’s official: America is now No. 2
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The wise Chinese dragon?
You've been watching too many kung fu movies from the 70s :P
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green_boogers
8 years ago
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To be less figurative about it, China's huge trade surplus gets used for many things. One of them is to buy the national debt of other countries. When they own enough of it, the yuan will become the reserve currency of the world. This is fine until recession hits the debtor country. Since their interest leaves the debtor economy for China, taxable GDP decreases making treasury bond issues more risky. China negotiates to buy assets in other countries in lieu of debt restructuring. At the very end of the process, China militarizes. End game - checkmate.
PS. Thanks for mentioning Kung Fu. He was a cool guy.