China doesn’t seem to fear a trade war with the US. And it has plenty of means at its disposal to fight the war, including the scaling back of buying US Treasuries, or even worse, sell-off of US Treasuries. But China will never use this weapon – because it has very good reasons to keep buying US Treasuries. Specifically, because of its trade surplus with America. Still, it is worth examining what would happen if China did stop buying US Treasuries -- or even worse, began selling them?

Source: Forbes March 25, 2018 15:00 UTC