Amount of U.S. treasury bond owned China shifts and it indicates not only the market in China, but oversea. U.S. debt to China is not a similar structure as the mortgage you see in daily life. Sometimes treasury bond and somehow Federal Reserve Interest rate are tighten closely. Lower Fed interest rate allows the foreign investors hold large portion of the debt, and when Fed rises the interest rate, the foreign investors have to back on their domestic market rather than oversea. It is a complicated that cannot be explain in a few sentence, and that's why I choose this to do on research paper.
“the process of repeated crises and temporary reprieves will only solidify the Chinese government’s determination to diversify its holdings away from dollar-denominated assets. Moreover, these crises provide ammunition to advocates within the Chinese government for expanding the role of the renminbi in international markets. Both of these trends will erode the ability of the United States to issue debt at super-low interest rates, and accelerate the ascent of China’s currency.”
China tries to diversify Renminbi away from U.S. dollars.
It is unnecessary for U.S. government to pays off Chinese Debts.
Deficit-worriers portray a future in which we’re impoverished by the need to pay back money we’ve been borrowing. They see America as being like a family that took out too large a mortgage, and will have a hard time making the monthly payments.
US government has borrowed money from Chinese government to fund the expenses. This debts are typically called bonds where the borrowing entity issues a paper saying that it is borrowing suppose a million dollars from the lending entity, for a period of 10 years. As a compensation, the borrowing entity will pay a 1% interest each year, which, in this case is 10 thousand dollars. After a period of 10 years, the borrowing entity will give the capital (a million dollars) back.
U.S. own Chinese government 1.3 trillion dollars
Can the United States public universities be tuition-free?
Through this recent presidential election, Bernie Sanders, a socialist, brings out an issue about affordable colleges (free college tuition and no students’ debts), which is common in a lot of affluent European countries, such as Germany, Sweden, and Norway. Some people argue if it can be done in other countries, it could be done in America; on the other hand, people argue that we are different than other countries.
Will enough tensions lead to a major warfare among the big power (U.S. Russia and China)? I would say yes, but I do not want it happens. U.S., Russia and China have content in many fields especially in economics and military. Tension is growing bigger and bigger, for example, U.S. bring out TPP agreement (a trade agreement seeks to lower trade barriers between twelve Pacific Rim), which brings 40% of the world trading in general, while without one of the biggest exported country, China.