What Would Happen If China Started Selling Off Its Treasury Portfolio?
Just How Important Have Foreign Inflows Been to the Treasury Market?
Recommendation
With trade tensions looming and China in the cross hairs of the Trump Administration’s tariff bazooka, one of many concerns involves the financial impact of a full-scale fight between the world’s two largest economies. China has several possible responses to US-imposed tariffs, and while retaliatory duties or currency depreciation are possible, economist Brad W. Setser previews a third option: Chinese leaders divesting the country’s $1.5 trillion US Treasury and agency securities portfolio. getAbstract recommends this insightful though technical report to analysts and economists for its nuanced look at fiscal and monetary policy salvos in a trade war.
Summary
About the Author
Brad W. Setser is a senior fellow at the Council on Foreign Relations.
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