Question

China is considered as one of the most borrowing countries to USA with more than $2...

China is considered as one of the most borrowing countries to USA with more than $2 thousands Billions. My question is why China does not think to sell the debt back to USA?

Homework Answers

Answer #1

It is not possible for China.

China is currently invested in many mega projects such as the "Belt-Road Initiative" (perevioulsy know as One belt one road), which requires huge capital investment. Also chinese projects are in mostly in LDA's (least developed countries) such as countries in central Asia and Africa. These countries rarely have the financial power to provide monetary support in these Chinese projects, which happen to take pack in their respective countries. Thus the Chinese government often have to loan out money to these countries. China will choose to hold out these debts as long as possible as it is to the Chinese interest. Remeber paying back these debts by moeny or goods will also diminsh the value of US Dollars, as the demand for US dollars will fall, this will hamper China as US is the biggest importer to China.

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