Pre-trump: Why does China need US debt? They can be paid US $ for stuff then buy US assets like stocks instead? Then they get rich without worrying if they get paid. (Assuming the US doesn't break down basic corporate norms and confiscate assets)
Paper assets are only meaningful because an army or police force says they are meaningful.
If police and militaries disappeared overnight, then stocks would have no value. Guns would have value and food would have value. Ability to produce these things have value, but paper and whats on it has no value. Moving physical objects has value.
In war, all of these things on paper don't matter compared to physical reality and how it is crafted.
So investing creates a dependence on the American enforcement system which would not enforce in china's favor in case of a war. In some ways investing in a foreign country weakens your own sovereignty and it definitely weakens sovereignty as Putin or Xi would define it.
hayst4ck|10 months ago
If police and militaries disappeared overnight, then stocks would have no value. Guns would have value and food would have value. Ability to produce these things have value, but paper and whats on it has no value. Moving physical objects has value.
In war, all of these things on paper don't matter compared to physical reality and how it is crafted.
So investing creates a dependence on the American enforcement system which would not enforce in china's favor in case of a war. In some ways investing in a foreign country weakens your own sovereignty and it definitely weakens sovereignty as Putin or Xi would define it.