Wednesday, August 24, 2011

China must punish US for Taiwan arm sales with 'financial weapon' (From a Chinese Media Outlet)

Now is the time for China to use its "financial weapon" to teach the United States a lesson if it moves forward with a plan to sale arms to Taiwan. In fact, China has never wanted to use its holdings of US debt as a weapon. It is the United States that is forcing it to do so.

The US House of Representatives just passed a debt ceiling bill on Aug. 1. On the next day, a total of 181 members of the House of Representatives signed a letter sent to US President Barack Obama stating that the federal government should approve the sale of F-16 C/D fighter jets to Taiwan as soon as possible to help ensure peace and stability across the Taiwan Strait.

The US Senate passed the debt ceiling bill on Aug. 2, and Obama signed it into law. Shortly thereafter, the US Treasury obtained the authorization to issue 400 billion US dollars in new debt. Will China become the largest buyer of US debt again?

Despite knowing that major creditor countries, especially China, would be the main buyers of its new debt, certain arrogant and disrespectful US Congress members have totally ignored China's core interests by pressuring the president to sell advanced jets and even an arms upgrade package to Taiwan.

US treasuries will lose value if China stops or reduces its purchases of them on a large scale, which will also affect the value of China's US treasury holdings. However, as the situation has gotten out of hand, allowing Washington politicians to continue their game might lead to more losses. more