How can China hurt us? Let us count the ways:
First and foremost, they hold most of our foreign debt, 19 percent or $1.17 trillion. By buying U.S. treasuries, China keeps our interest rates low but it also gives China leverage over U.S. fiscal policy.
What would happen if China stopped buying U.S. treasures or, worst still, called the loans?
China also controls the supply of the world’s rare earth metals that are used in most of the high-tech products we take for granted like smart phones and hard drives. More importantly, these materials are necessary components for building smart bombs and military radar. It’s not that we don’t have any of these minerals. It’s just that our government shut down our only rare earth mine and allowed the Chinese to buy the company that supplied them.
Lastly, China now has access to our most sensitive military technology. That which wasn’t stolen was transferred overtly by previous administrations. Continue reading “The U.S. vs China”