China Threatens to Use ‘Financial Weapon’ Against America
By: Gordon G. Chang
On Monday, People’s Daily, China’s leading newspaper, stated it was time for Beijing to consider using its “financial weapon” against the United States.
The Communist Party’s flagship publication suggested that the Chinese government “directly link” its purchases of US Treasury debt to Taiwan arms sales and “require” ratings agencies to downgrade the United States in order to force up interest paid toChina. China should also “launch limited trade sanctions” against states whose representatives in Congress support Taiwan. “China-US relations will always be constrained by these people and will continue along a roller coaster pattern if China does not beat them until they feel the pain,” the paper said.
The context for the stinging piece in the party’s self-described mouthpiece may be proposed arms sales to Taiwan, but the general message is clear: China should use its holdings of American obligations to accomplish its many geopolitical aims. “In fact, China has never wanted to use its holdings of US debt as a weapon,” the paper noted. “It is the United States that is forcing it to do so.”