- Associated Press
As the largest foreign holder of US Treasurys, China has a heft in bond markets that no other creditor can claim. The Asian giant is so powerful, in fact, that it could — if it chose — help the White House end the debt-ceiling impasse.
Any threats from Chinese officials that the country plans to slash its Treasury holdings in response to a US downgrade would likely prompt a market selloff. And yet that could have a desirable, longer-term impact if the plunge was sharp enough to help the White House make its case to holdouts in Congress who are blocking a deal.
So far, Treasury prices have been barely dented by the political vacillation in Washington. But a bigger drop in prices might change lawmakers’ minds and hasten an agreement, as it would expose the costs of dithering. In turn this would likely boost Treasurys again and China’s holdings would return to square one. All would be well in the world again.
But would China ever play such Machiavellian game? Not likely, say China experts.
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In recent years, China has re-invigorated its support for leading state-owned enterprises in sectors it considers important to “economic security,” explicitly looking to foster globally competitive national champions.
The Chinese government seeks to add energy production capacity from sources other than coal and oil, and is focusing on nuclear and other alternative energy development.
China is the world’s fastest-growing major economy, with an average growth rate of 10% for the past 30 years.
Available energy is insufficient to run at fully installed industrial capacity, and the transport system is inadequate to move sufficient quantities of such critical items as coal.
Agricultural output has been vulnerable to the effects of weather, while industry has been more directly influenced by the government.
China has acquired some highly sophisticated production facilities through trade and also has built a number of advanced engineering plants capable of manufacturing an increasing range of sophisticated equipment, including nuclear weapons and satellites, but most of its industrial output still comes from relatively ill-equipped factories.
Over the years, large subsidies were built into the price structure, and these subsidies grew substantially in the late 1970s and 1980s.
Both forums will start on Tuesday.
In 2009, global ODI volume reached $1.1 trillion, and China contributed about 5.1 percent of the total.
China is expected to have 200 million cars on the road by 2020, increasing pressure on energy security and the environment, government officials said yesterday.
In large part as a result of economic liberalization policies, the GDP quadrupled between 1978 and 1998, and foreign investment soared during the 1990s.
Despite initial gains in farmers’ incomes in the early 1980s, taxes and fees have increasingly made farming an unprofitable occupation, and because the state owns all land farmers have at times been easily evicted when croplands are sought by developers.
Except for the oasis farming in Xinjiang and Qinghai, some irrigated areas in Inner Mongolia and Gansu, and sheltered valleys in Tibet, agricultural production is restricted to the east.
China ranks first in world production of red meat (including beef, veal, mutton, lamb, and pork).
Growing domestic demand beginning in the mid-1990s, however, has forced the nation to import increasing quantities of petroleum.
Alumina is found in many parts of the country; China is one of world’s largest producers of aluminum.
Coal is the single most important energy source in China; coal-fired thermal electric generators provide over 70% of the country’s electric power.
Although a British crown colony until its return to Chinese control in 1997, Hong Kong has long been a major maritime outlet of S China.
Rivers and canals (notably the Grand Canal, which connects the Huang He and the Chang rivers) remain important transportation arteries.
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How China Could Break the Debt-Ceiling Impasse, And Why It Won’t
