Posted on

China wants Yuan to replace US dollars as the world’s Global Currency


welcome By: Elena Grace Flores
It’s confirmed that the U.S. debt to China is already at $1.243 trillion, as of April 2016 – which is 30% of the $4.046 trillion in Treasury bills, notes, and bonds held by foreign countries. The rest of the $19 trillion debt is owned by either the American people or by the U.S. government itself. China holds less U.S. debt than the record $1.317 trillion it held in November 2013. It’s gradually lowered its holdings to allow its currency, the yuan, to rise. That’s to allow its currency to become traded more in global markets. In the long-term, China wants the yuan to replace the U.S. dollar as the world’s new global currency.

In February 2014, China reversed course and began weakening its currency again. That’s because the yuan was still pegged to the dollar. Both rose 25% in 2014 and 2015. China needed to lower the yuan to remain competitive with other emerging markets. China is more than happy to own nearly a third of the U.S. debt. Owning U.S. Treasury notes helps China’s economy grow by keeping its currency weaker than the dollar. That keeps products exported from China cheaper than U.S. products, creating jobs for its 1.4 billion people.

On the other hand, United States allowed China to become one of its biggest bankers because the American people enjoyed low consumer prices. Selling debt to China allows the U.S. economy to grow by funding federal government programs. It also keeps U.S. interest rates low. However, China’s ownership of U.S. debt is shifting the economic balance of power in its favor. This is why China is so confident in its triggering World War III – and the South China Sea conflict where the U.N. tribunal ruled in favor of the Philippines will give them the opportunity to test their war capability with the Americans as well as the rest of the super powers that pledged alliance with the U.S..




Reference: http://useconomy.about.com/od/worldeconomy/p/What-Is-the-US-Debt-to-China.htm

We are compliant to EU’s Cookie Policy: http://www.mediacurious.com/cookie-policy/

Facebook Comments