What would happen if China sold its US bonds?

The repercussions for China of such an offloading would be worse. An excess supply of U.S. dollars would lead to a decline in USD rates, making RMB valuations higher. It would increase the cost of Chinese products, making them lose their competitive price advantage.

How much money does China owe the US 2020?

China takes the second spot among foreign holders of U.S. debt with $1.07 trillion in Treasury holdings in April 2020, just behind Japan.

Why is China selling US bonds to defend its currency?

The devaluation was caused by the increase in interest rate by the Federal Reserve, which appreciates US dollar against all other currencies, including RMB. China is selling its US bonds to defend its currency from this devaluation. For both sides, the exchange rate is simply determined by the demand and supply on the exchange market. Both

What will happen to US / Chinese economy if China sells dollars?

Now, the question is what will happen to US / Chinese and Global economy if they start selling these dollar assets. Appreciation in the Yuan and depreciation in the US dollar. If China sold US assets and held more of its own currency, it would cause an appreciation in the Yuan and fall in the value of the dollar.

What would happen if China sold off its treasury reserves?

It remains to be seen what China might do if it were to theoretically sell off its Treasury securities. The drop in reserve assets likely would hurt the nation’s credit ratings, and those reserve assets would have to go somewhere.

What would happen to China if the US went bankrupt?

US holders of assets will make a killing. Chinese retail investors holding US bonds, and pricey shares and Manhattan apartments;with Chinese low cost production capacity wiped off. China would be great again. Paul Krugman and 45 will jointly sign a thank you note for Xi. They would never do that because they would take a beating on the price.