Foreign debt to China

Think our massive debt to China won’t have policy implications? Taiwan has long been an ally of the US. Red China is not but they hold a massive amount of US debt. This story explains how China could use that as leverage in our relationship with Taiwan.

Senior Chinese military officers have proposed that their country boost defense spending, adjust PLA deployments, and possibly sell some U.S. bonds to punish Washington for its latest round of arms sales to Taiwan.

The Chinese have complained loud and long about our relationship with Taiwan, which it considers a “rogue state.” We have usually brushed off the Chinese because they really couldn’t do anything about it short of invading Taiwan and starting a world war. Now it looks like they may have the upper hand…

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