Expert Chaslau Koniukh
  • Companies
  • Global investment
  • Investors
  • Terminology
  • Economy
  • Stock Market
  • World exchanges
  • Tech and Marketing
Deterioration of relations
Economy

Consequences of the deterioration in relations with the United States for China: analyst predictions

27.04.2021
2 min read

Deterioration of US-China relations: a risk to the financial system

The trade conflict between the U.S. and China has been going on for several years, and during this time the powers have been going through various stages of relations. Representatives of the countries have sat down many times at the negotiating table, reached consensus on a number of issues, but after a while the situation was getting hot again. Now there is another deterioration of relations, which causes negative moods in China. The problem concerns financial systems, and there is a great risk that China may be disconnected from payment systems that work with the dollar.
Chinese experts and analysts are working out forecasts of the development of relations between the powers, considering the worst-case scenario. In their opinion, the government of the country should direct all efforts to strengthen the national currency in the global market. This will reduce the dependence of the yuan on the dollar and reduce the likelihood of the powers to be in financial isolation. Last year, the share of the Chinese currency in world reserves was more than 2%.
Experts say that despite the aggravation of relations between the powers, the peak of the conflict has not yet been passed. If pessimistically predicted, the U.S. may impose sanctions on the assets of Chinese companies and individuals that are in the U.S. territory.

Deterioration of relations

However, there is also a deterrent factor for Washington. China owns about $1 trillion of the redeemed U.S. public debt. And in case the White House wants to disconnect Beijing from the financial systems, the latter will take retaliatory measures, which may be aimed at selling some of this debt. Such actions will cause serious changes in the world market and will bring the global economy into crisis.
The mass sale of public debt will affect its value – it will fall, but the yield will start to grow sharply. This situation will complicate the procedure of future borrowings and increase the amount of their service.
It should be noted that China and several other countries, including Russia, are beginning to gradually abandon the use of the dollar. Countries for bilateral settlements use, in most cases, the euro and yuan. The purpose of such changes is to reduce the dependence of Russian and Chinese economies on the dollar.
At the beginning of last year, more than 50% of exports to China were paid in euros, and the share of this currency in trade operations is growing.
However, neither Russia nor China can completely abandon the dollar. Calculations in the U.S. currency are much more convenient; moreover, it is the main currency on the global market. Moreover, even the crisis caused by the pandemic has not been able to shift the dollar from the leading positions, and according to experts, it will continue to strengthen.

Tags: Global Economy
0
Previous Post Howard Schultz: history of the Starbucks coffee chain foundation Next Post Chinese company Xpeng Motors placed its shares on the New York Stock Exchange

You Might Also Like

Introduction of import duties
Economy
Introduction of import duties: how did the United States respond to the French digital tax?
14.10.2020
new five year plan
Economy
The Chinese government has published a new five-year development plan
16.07.2021
U.S. budget deficit to reach record highs
Economy
The U.S. budget deficit: a forecast from the Congressional Budget Office
03.11.2021
record growth
Economy
Germany reported record economic growth in Q3 2020
05.08.2021
growth of the government debt
Economy
Analysts predict that the U.S. government debt will double by 2050
27.05.2021
Economies of the Baltic States
Economy
Economies of the Baltic States: main factors affecting their development
01.05.2020

Recent Posts

  • 1Mary Erdoes
    Mary Erdoes: the most powerful woman on Wall Street
    02.06.2023
  • 2Pilatus Aircraft
    Pilatus Aircraft: the history of the Swiss aircraft manufacturer
    01.06.2023
  • 3investment triangle to select a particular asset
    Investment triangle: how to choose the best asset for investment
    31.05.2023
  • 4Nissan and Renault
    Nissan and Renault invest $600 million in a joint venture
    30.05.2023
  • 5Noventiq
    Noventiq plans to float on the Nasdaq exchange
    29.05.2023

Popular Posts

  • Businessman Chuck Feeney: the man who gave the world Duty Free
  • Field of activity of the American Monsanto Company Corporation
  • Skolkovo analysts: the Russian energy market is suffering losses
  • ExxonMobil: the story of the world’s largest oil corporation

Social media

Editor's Picks

Chaslau Koniukh
Analytics

American bankers from JPMorgan and Goldman Sachs advise to invest in gold: review by Chaslau Koniukh.

Spokesperson
17.08.2020
Expert Chaslau Koniukh
Analytics

Chaslau Koniukh on the analysts’ opinion on the key stake size change soon

Spokesperson
18.06.2020
expert Chaslau Koniukh
Analytics

Chaslau Koniukh: Internet trade market in Russia may reach 2.78 trillion rubles.

Spokesperson
30.05.2020
Will the U.S. oil shale industry be able to quickly recover from the crisis: A Review by Chaslau Koniukh
Analytics

Will the U.S. oil shale industry be able to quickly recover from the crisis: A Review by Chaslau Koniukh

Spokesperson
16.05.2020

Latest Posts

inflation in the UK
Inflation in the UK will decline: analysts’ forecasts
03.06.2023
Mary Erdoes
Mary Erdoes: the most powerful woman on Wall Street
02.06.2023
Pilatus Aircraft
Pilatus Aircraft: the history of the Swiss aircraft manufacturer
01.06.2023

Chaslau Koniukh

Expert Chaslau Koniukh

Chaslau Koniukh – an expert in marketing and project management, IT consulting, international investments, investor, financial analyst. A commodity trader, private consultant, entrepreneur, lecturer, author of several articles on the stock market.

Popular Posts

  • Businessman Chuck Feeney: the man who gave the world Duty Free
  • Field of activity of the American Monsanto Company Corporation
  • Skolkovo analysts: the Russian energy market is suffering losses
  • ExxonMobil: the story of the world’s largest oil corporation
  • Netflix: the streaming service that helped people survive the pandemic
Expert Chaslau Koniukh
  • Facebook
  • Twitter
  • Instagram
  • Biography

Chaslau Koniukh – an expert in marketing and project management, international investments, financial analyst.

Social media

Menu

  • Biography
  • Companies and corporations
  • Global investment
  • Investors and Entrepreneurs
  • Economy
  • Market terminology
  • Stock Market
  • World exchanges
  • Tech and Marketing
  • Analytics