Beijing Warns US Senate Of Trade War If Anti-China Bill Is Passed

October 11 00:00 2011

New York, October 11 ( – The Chinese have reacted very aggressively to the news that US may be putting into effect legislation that will hamper the viability of Chinese exports. This maybe a major hit on the export driven Chinese economy. The Chinese economy holds substantial amount of US treasuries, and is completely capable of causing mayhem to the value of the dollar if they resort to forex market operations. It is for this reason that China has warned the US Senate of dire consequences if the bill is passed.

The Chinese officials were careful in the fact that the expressed their sentiment but not their plan of action. The resorted to vague statements like starting a trade war between US and China and causing setback to global recovery. However, their exact plan of action remains unknown.

The Chinese warning cannot be ignored. Firstly an economic tussle between the top two economies of the globe given the backdrop of the current state of events could spell endgame. Also, the Chinese holding of American treasuries is the largest in the world. If they began flooding the international debt market, the value of dollar could take a severe beating.