The depreciation of the US dollar will definitely have a great impact on China's economy, because these US dollars and foreign currencies are exchanged by enterprises and individuals with the central bank. If the dollar depreciates, the pressure on the central bank can be imagined.
China's holding of US Treasury bonds is a win-win situation for China and the United States. To put it bluntly, buying U.S. Treasury bonds means that China earns too much dollars by exporting (that is, the factory of the world). The factory takes the earned dollars to the bank and converts them into RMB, paying workers' wages, raw material expenses and other expenses. However, in order to preserve and increase the value of the dollar, it is necessary to invest abroad. China will buy American bonds, which are the safest and most stable, so we can't buy Iraqi bonds! We lend money to the United States, which can afford to consume things, so we will continue to import our products. Our factory can start more jobs, attract employment, purchase raw materials and so on.
The United States is the only superpower in the world, ranking first in military, science and technology and finance. Its national debt has the highest security and the best liquidity. If China doesn't buy it, Japanese and Middle Eastern oil countries will also buy US Treasury bonds. Of course, with the depreciation of the dollar, China's dollar foreign exchange assets have shrunk, but if it does not buy US Treasury bonds, the shrinkage will be more serious; If the dollar rebounds, it may reduce the shrinkage of assets. Therefore, buying US Treasury bonds is a last resort, and it is impossible to buy stocks. In this way, the risk is too high. What if you lose money? Look at China's stock market, which has dropped from 6,000 points to more than 2,000 points. How much has the asset shrunk? There are also many QDII funds that invest overseas in China, which are losing more or less. If we buy industrial resources, such as iron ore and oil, China will buy more things. Now I don't know how much the prices of these things have gone up, because international speculators are speculating on the concept of China.
Judging from the consequences of selling US Treasury bonds, China can't be easier than the United States, hurting people by 3 inches and 1 foot. If China sells short US Treasury bonds, it will be symbolic and the international market will certainly follow suit. The return of the US dollar will make depreciation the only choice for the US dollar, and the negative impact of the depreciation of the US dollar and the appreciation of the RMB on China is beyond doubt. This will hit our manufacturing exports. The appreciation of RMB will make the price of export products rise, thus losing international competitiveness, or the international market. Then, to whom the products are sold, our income will be very low, and there will be 800 million farmers. It is impossible to consume so many things. Our export factory closed down. What about power plants, railways, steel mills, cement plants, oil companies and other upstream related enterprises? Our factory closed down. Who pays the workers and buys the farmers' food? There are also service industries related to people's lives, which are closed directly. And our 1 multi-trillion assets have shrunk dramatically!
I just said what I thought, and it was in some vernacular, and there were more complicated things. After all, the world economy has been globalized, the US dollar is the world currency, and all international transactions are in US dollars, iron ore, oil, gold and so on. Moreover, the foreign exchange reserves, creditor's rights and debts of many countries are US dollars, so this is a very complicated matter, and I can't finish a few words.