China Economic News

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If China loans are based on their domestic rate and the world is increasing their interest, the after effects is that China will have to defend its peg if it so intends to protect its companies. China has suffiicent reserves to do this because it has a lot of US bond holdings. Holding everything constant, what would happen is that China would decide to sell off almost all its US Treasuries and maybe since it has fewer FX, they will work with Russia in importing oil and gas even more and not import oil and gas from other countries as they are usually agreed on USD basis

Its quite hard to predict what would happen if the inverted happens. But the above paragraph is my guess
@CY - make sense to me too.

If we push forward your theory a bit, Crypto currency would be another probable scenario too.

[Image: 900px-Money_flower.png]


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