The U.S. debt problem and China's aid.
The U.S. debt problem has become more and more serious in recent years, which has forced Biden's ** to turn to China for help to increase the U.S. debt burden. Total U.S. debt has reached $34 trillion and is rising at an even higher rate. If no one holds U.S. bonds, this is not only because the U.S. lacks sufficient capital to operate, but more importantly, its identity as the "world currency" is being questioned. So the U.S. is pinning its hopes on China to buy U.S. bonds. China did the same in 2008, and because it's the world's second-largest economy, it's well positioned to come to the aid of the United States. Since the second half of this year, some senior US financial leaders have gone to China to participate in a series of talks. In November, China halted selling U.S. bonds for seven consecutive months, adding $12.4 billion. This not only shows that China is willing to strengthen cooperation with the United States, but also satisfies China's own economic development needs.
However, China's increase in dollar assets is only a drop in the bucket for the United States. According to a new report from the U.S. Treasury Department, the U.S. budget grew by 50% in December, while the Federal Reserve lost $114.3 billion. Goldman Sachs, an investment bank, also issued an early warning, saying that there is an 80% chance that the United States will default on its debt this year. In addition, as the Red Sea crisis continues, the United States is facing the instability of the global ** chain and energy supply, which further exacerbates inflation. Consumer prices in the United States rose by 3.4 percent in December compared with a year earlier. All the evidence points to an extremely disadvantaged situation for the United States.
Biden** has the limits of asking China for help.
Under strong pressure, Biden sent a financial delegation to China, hoping that China would continue to inject money into U.S. bonds. China and the EU have conducted in-depth exchanges on a number of financial matters and have ensured good communication channels. However, the Chinese side has put forward some demands in response to the demands made by the United States, that is, to terminate sanctions against China without harming China's interests, and so on. However, judging by the position of the United States, it is true that they lack a sincere request for help.
After the U.S.-China economic and trade talks, the U.S. moved quickly to issue a "purchase ban" on six Chinese companies based on the Defense Authorization Act for Fiscal Year 2024 to require production in China. In recent years, the United States has continued to impose unreasonable sanctions on Chinese companies on the grounds of "**", in an attempt to achieve the goal of "decoupling and breaking the chain". However, the economies of China and the United States are closely linked and interdependent, and neither country can separate from the other. The United States will eventually pay a heavy price for blindly "decoupling" from China.
So China should not expect the United States to deliver on its promises to China. China must calm down, constantly increase its strength, and resolutely respond to the US move of "containing China," and at the same time, it must have a firm strategic determination not to let the US act disrupt its pace.
Personal Summary. As mentioned in the article, the debt problem of the United States has become a serious challenge for the whole world. China is the world's second largest economic power, with the largest foreign exchange reserves, and plays a pivotal role in the international community. Over the years, China has become the largest creditor of the United States and a major source of financing. While the U.S. hopes that China will continue to finance its U.S. bond issuance to reduce its debt, China also has its own development needs and interests to consider. China must rise to this challenge by building up its power and tackling U.S. wrongdoing.
I believe that in order to resolve the economic and political disputes between China and the United States, the most important thing is to achieve "mutual benefit and win-win results". China and the United States should pursue a path of common development based on the principles of mutual respect and mutual benefit. On this basis, China must deepen the reform of its domestic system, improve its overall competitiveness and sustainable development strength, and ultimately realize a strong country with good institutions, stable economy and strong diplomatic strength. Only in this way can China better participate in global affairs and make more efforts to safeguard world peace and development.