China decided to hit the USA?

12 months ago

The last six months in world politics and economics have been far from the simplest. The US trade war with China, then the Russian oil war with the Saudis against a pandemic. It was hard for everyone.

But against the background of all these shocks, one can especially emphasize the harsh rhetoric of official Washington, which is either dissatisfied with imports from China, or the pipe from Russia to Europe impedes it, or they are going to “forgive” half of their debt to China. And the Americans owe China a lot – about 1.1 trillion dollars. Those. they did not lend directly, but issued treasury bonds, which are bought by many investment funds and states trying to invest their income.

So, China bought US $ 1.1 trillion of US Treasury bonds. Those. actually credited the US economy for this amount.

And just the other day, the Chinese announced that they are going to put the United States on the shovels in the technological field and in the next 4-5 years they will spend $ 1.4 trillion on the development and construction of 5G networks, data centers, high-speed rail lines, ultra-high voltage power lines, the development and widespread adoption of artificial intelligence. The goal is to abandon Western technology, especially from the United States. And the United States does not really like this, because it means that American technology companies will not earn more in China.

But $ 1.4 trillion is an astronomical sum, too big even for China with its enormous gold and foreign exchange reserves. Especially with the calculation of their development over the five-year period. China says they also count on attracting private investors. But, remembering all those expensive construction and infrastructure projects (such as entire empty ghost towns) that were implemented in China and did not bring the desired return, investors are unlikely to be thrown into the crowd.

So maybe the Chinese decided to act smarter, and while the Americans will recover from the pandemic, they, instead of continuing to lend to the American economy, will invest more money in innovation at home. Or maybe they will also throw off part of the US treasury bonds so that they do not have the thought of “forgiving” their debts. And plans to invest in yourself – is this a signal for Americans not to count on new debts and start preparing money to pay for old ones?

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