"Simple trade wars and reciprocal countermeasures cannot adequately address future China-US differences," said Wang Wen, executive dean of Renmin University's Chongyang Institute for Financial Studies. This highlights the complexity of the economic interactions and suggests that traditional responses may be ineffective in dealing with the evolving tensions between the two powers.
If Beijing chooses to sell off its significant holdings of US Treasuries, which currently total around $734 billion, it could drive US bond yields upwards, potentially causing turbulence in global financial markets. This move illustrates the lengths to which China may go to exert economic pressure on the US.
The prospect of another trade conflict between the US and China could lead to further escalation, and China’s economic strategies may not safeguard it from potential fallout, given its own economic challenges, like the property crisis.
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