What If China Collected on U.S. Debt?

ABC's Robert Krulwich takes an animated look at China's investment in the U.S.

[commiekiller]

"what happens to all those workers making things for America?"
They start making things for

[djcfb]

dude, it's yuan OK? not Chinese money, lmao

[Henri_Ikari]

Mutually assured economic destruction.

[vlad]

The Chinese would not go out of business, they would simply start consuming the goods that they are now shipping over. There are about 3 times as many Chinese as Americans, I don't think that they would mind reaping some of the benefits of their labor.

[darrinbrand]

Peter Schiff is right...  The increase in the value of Chinese currency will result in Chinese workers having more purchasing power and buying their own goods.

[Barskor]

ABC if the cost to sell goods in the US rises too high and the value of Chines money also rises the Chines can simply increase domestic sales of it's goods and circulate money within it's own borders in addition to selling to other markets like the EU, Africa, Russia and other Asian nations.
Just because currently the US is the biggest purchaser of Chines goods has no bearing on it remaining so in the future.

[CassioVA]

Resume: China is becoming the number 1 economy...

[badpanda]

/ *Even so.. this can't go on indefinitely.. You can't solve a debt problem by simply adding more debt..*

That seems to be the current finincal staregery of the US

[newking]

Wow this was 8 years ago.
And its happening now😂

[InstTaxSolutionsLLC]

It's fascinating to see global economics at work. As is typically the case, the answer is not quite as obvious as it would first appear.

[aucklandvansaun]

Watching this in 2022. I'm getting big foreshadowing vibes...

[PortfolioPL]

Funding R&D is a great idea. Knowing the Chinese they already have long term plans for this too.

[BW]

China doesn't need to call in its loans.... it can merely stop lending any more. This will happen eventually as China will simply run out of money to lend the US. It is also likely to do so, since eventually it will transition into a post-industrial economy -- like Japan, South Korea, etc. Eventually, with its strong education, infrastructure, etc. is will produce enough of a middle-class that its own domestic market will offset US sales -- especially if the US consumers collapse. Like Japan and South Korea... it will eventually move to higher end products and start consuming these.

[evolzed]

By selling the American dollar to buy Chinese yuan (Chinese currency), there would be in increase in supply of American dollar on the "market" (more accessible) and increase in demand for yuan (less accessible). Hence the change in the value of the currencies.

[keffinsg]

The chinese dont heat their schools not because they cant afford it. They see central heating as unnecessary and wasteful. There is a big difference in outlook here. Not everybody wants to do things the american way.

[CK]

I did not know they hand sew those cheep balls

[Mrhappycitizen]

Could you please cite your source on this, I have heard this before and would love to know where this comes from. Thank you.

[alvisc]

China collecting on the US is like you loaning Al Capone $10000 and then expecting to "collect" it back from him in a week in interest lol

[richardhe]

I'm sure this isn't how it works lol. Asking America to pay debt, is not simple as that.

[dudeman]

I hope people do recognize that one side of purchasing assets (debt) requires a flow of goods on the other side. China is buying US debt to drive their currency down and export more goods into the US. If China stops buying foreign debt or even slows down the rate of purchases (decreases investment), then the Chinese export sector gets completely wiped out. If they keep doing what they're doing, we'll continue exporting liquidity, inflation and keep driving the Chinese bubble via QE. China is stuck in a major catch-22.