What would happen if China called on its loan to the US? Watch

morris743
Badges: 0
Rep:
?
#1
Report Thread starter 7 years ago
#1
Obviously the US would be stuffed but would it simply go to war with China then? Nothing to lose and all that... Would the allies of the US also go to war with China or actually switch sides as they know where their bread is buttered? It could also be convienient for certain US allies...

I guess the US would see it as an act of war but would China not be well within their rights to do this? Of course they won't - not only for the implications described, but the fact they are pretty reliant on the US themselves.
2
reply
Clip
Badges: 17
Rep:
?
#2
Report 7 years ago
#2
China would be finished, because no one would ever trust it as a creditor again. And why would they call their loans?

Anyway, how did you get from "We want our money back" to "Ok, well we're going to war, then."?
0
reply
0906079
Badges: 0
Rep:
?
#3
Report 7 years ago
#3
China would just stop exporting to America and then they'd be effed.

Gl getting people to work for $1/hr in America, or paying $$$ for a $ product.
0
reply
Nextmove
Badges: 0
Rep:
?
#4
Report 7 years ago
#4
(Original post by 0906079)
China would just stop exporting to America and then they'd be effed.

Gl getting people to work for $1/hr in America, or paying $$$ for a $ product.
Why would they stop exporting to America? that would be pointless for China.
0
reply
0906079
Badges: 0
Rep:
?
#5
Report 7 years ago
#5
(Original post by Nextmove)
Why would they stop exporting to America? that would be pointless for China.
Because if America point blank refuse to pay back the loan I doubt China will just want to carry on as usual and not take some form of action. China export to the whole world anyway and if they pull America out it would hardly affect them much, even though America is a massive country.
0
reply
Chazzer66
Badges: 5
Rep:
?
#6
Report 7 years ago
#6
China needs US more than the other way round - any LEDC can make ipods given a factory, but only America does capitalism in its most ruthless and profitable manner.
:fatcontroller:
1
reply
Flying Scotsman
Badges: 12
Rep:
?
#7
Report 7 years ago
#7
Who owes the money to whom? There are some contradictory posts here..
0
reply
Nextmove
Badges: 0
Rep:
?
#8
Report 7 years ago
#8
(Original post by 0906079)
Because if America point blank refuse to pay back the loan I doubt China will just want to carry on as usual and not take some form of action. China export to the whole world anyway and if they pull America out it would hardly affect them much, even though America is a massive country.
Ultimately it'll have to end in war then...

Both countries would be hit but America would be hit much harder, the only thing China could do is stop trading with the USA. That'd increase the price of goods in the US, Aggregate demand would drop, the trust in the US dollar would falter and their economy would pretty much start declining at a rapid pace.

Then China will increase the pressure on the USA to pay back their money even more whilst the USA is unable to do so and probably end up ... ughh... claiming the entire country?
0
reply
Tony_Soprano1
Badges: 1
Rep:
?
#9
Report 7 years ago
#9
they would stop delivering noodles to the US? oh yeah dont give me that BS about china being a real super power they just havnt got the innovation due to their capitalist ways. And all those people being surpressed/depressed and the millions living within poverty doesnt FOR **** make them someone to be threatened. I dispise the chineese.

Can you really see a chineese guy coming at you with a AK47 HAHAHAHAHA
0
reply
Jampolo
Badges: 0
Rep:
?
#10
Report 7 years ago
#10
(Original post by morris743)
Obviously the US would be stuffed but would it simply go to war with China then? Nothing to lose and all that... Would the allies of the US also go to war with China or actually switch sides as they know where their bread is buttered? It could also be convienient for certain US allies...

I guess the US would see it as an act of war but would China not be well within their rights to do this? Of course they won't - not only for the implications described, but the fact they are pretty reliant on the US themselves.
How are China reliant on the US? In fact, China and several other countries are trying to rid themselves of their dollar reserves..
0
reply
CombineHarvester
Badges: 14
Rep:
?
#11
Report 7 years ago
#11
They can't expect the US pay them when they don't have the money. If they wanted it back they'd simply be given shares, stocks, bonds etc. which would equate to the money owed. Probably give them military hardware worth millions or even billions which would reduce the debt. That wouldn't happen though, at worst they'd ask the US to pay back the loan at maximum capacity, if that happened relations would be strained.
0
reply
tigermoth99
Badges: 2
Rep:
?
#12
Report 7 years ago
#12
It'll be like Homefront, lol
0
reply
vin
Badges: 15
Rep:
?
#13
Report 7 years ago
#13
this was covered in an ep of the simpsons in the future:hmmmm: lisa is president and bart gets them more time by asking china "what happened to you man you used to be cool" so they gave the US more time:yes:
0
reply
Nick Longjohnson
Badges: 14
Rep:
?
#14
Report 7 years ago
#14
Do you honestly think the US has any intention of paying it's debts?

They can hardly pay the interest, let alone capital.
0
reply
Aj12
  • Political Ambassador
Badges: 18
Rep:
?
#15
Report 7 years ago
#15
(Original post by 0906079)
China would just stop exporting to America and then they'd be effed.

Gl getting people to work for $1/hr in America, or paying $$$ for a $ product.
As would China. Losing their biggest market
0
reply
ilovedubstep
Badges: 9
Rep:
?
#16
Report 7 years ago
#16
(Original post by Aj12)
As would China. Losing their biggest market
China's domestic market is rapidly growing. And I think there is some confusion in this thread. The Chinese government does not own American debt. It is Chinese businesses. It is right to say that if the US goes kaput then so will China, but in a few years time this may not be the case.

'If you owe £300,000 the bank owns you. If you owe £300,000,000,000 then you own the bank.'
0
reply
pol pot noodles
Badges: 19
Rep:
?
#17
Report 7 years ago
#17
(Original post by morris743)
Obviously the US would be stuffed but would it simply go to war with China then? Nothing to lose and all that... Would the allies of the US also go to war with China or actually switch sides as they know where their bread is buttered? It could also be convienient for certain US allies...

I guess the US would see it as an act of war but would China not be well within their rights to do this? Of course they won't - not only for the implications described, but the fact they are pretty reliant on the US themselves.
They can't just call in loans whenever they like. The Americans aren't stupid, when they sell their debt it's on a repayment schedule. If they want repayment earlier they can ask, and the Americans can refuse. The only thing China can do is stop further buying of US debt, which is sold at auction anyway so it won't really matter much.

(Original post by ilovedubstep)
China's domestic market is rapidly growing. And I think there is some confusion in this thread. The Chinese government does not own American debt. It is Chinese businesses. It is right to say that if the US goes kaput then so will China, but in a few years time this may not be the case.
That's false, the Chinese government owns approximately $1.1 trillion in US treasury securities. Britain is incidently the third largest holder of US debt with $270 billion. In total national governments own $4.4 trillion, with the rest of the debt being owned privately.
0
reply
ilovedubstep
Badges: 9
Rep:
?
#18
Report 7 years ago
#18
(Original post by pol pot noodles)
That's false, the Chinese government owns approximately $1.1 trillion in US treasury securities. Britain is incidently the third largest holder of US debt with $270 billion. In total national governments own $4.4 trillion, with the rest of the debt being owned privately.
The total debt is 14 trillion. So that's the majority of it owned privately.
0
reply
pol pot noodles
Badges: 19
Rep:
?
#19
Report 7 years ago
#19
(Original post by ilovedubstep)
The total debt is 14 trillion. So that's the majority of it owned privately.
Correct, but the Chinese government does own American debt, which you said it didn't. Most of the private debt is held by Western banks and businesses anyway, not the Chinese.
0
reply
X

Quick Reply

Attached files
Write a reply...
Reply
new posts
Latest
My Feed

See more of what you like on
The Student Room

You can personalise what you see on TSR. Tell us a little about yourself to get started.

Personalise

Have you registered to vote?

Yes! (260)
38.86%
No - but I will (46)
6.88%
No - I don't want to (49)
7.32%
No - I can't vote (<18, not in UK, etc) (314)
46.94%

Watched Threads

View All
Latest
My Feed

See more of what you like on
The Student Room

You can personalise what you see on TSR. Tell us a little about yourself to get started.

Personalise