The US pays it's bills. China defaulting devalues it's currency, making payment necessary in dollars. The US has a hard limit on how much yuan it will exchange for dollars to prevent a run on the currency. China cannot get enough dollars to pay the bill, while the US is the one country in the world to which China can't just say "lol no." Assets will be forfeit or one sided deals favoring the US will come out of this. The devaluation of the primary currency of a major trade partner means their goods cost less and their interest increases

[–] yogthos@lemmy.ml -1 points 1 year ago (1 children)

US economy would collapse overnight without China, thinking that US has some sort of upper hand here is the height of comedy. US doesn't produce much of anything today, its industrial base is around 11% of its GDP, and there is no substitute for China which is central to most supply chains.

[–] ruck_feddit@lemmy.ml 0 points 1 year ago (1 children)

China needs buyers. If the US stopped buying from China, it would be the same situation in China. Their economies are so intertwined that a war between them, even just financially, would ruin both

[–] yogthos@lemmy.ml -1 points 1 year ago (1 children)

China has plenty of buyers, that's the whole point of BRI and BRICS. Literally all of the world constitutes China's buyers with US being a small portion of that. China would be hurt by an economic war with US, but US would be completely devastated by it because US depends on essential products and commodities it can't get anywhere else. Meanwhile, people thought Russia would be ruined economically once being cut out of western economic system and here we are with even IMF now projecting growth for their economy. Incidentally, trade between China and Russia has already jumped to over 200 billion if you want to see an example of China replacing US with a friendly trading partner.

[–] 133arc585@lemmy.ml -1 points 1 year ago* (last edited 1 year ago) (1 children)

I want to point out that the fraction of imports/exports between the USA and China is roughly symmetric (by monetary value). In 2022, about 16% of China's exports were to the USA; in 2021, about 17% of the USA's imports were from China.

That being said, you're probably making a valid point about which items are flowing, not just the raw value of goods.

Also, I would think it's generally easier for a producer to find new buyers of what it's already producing, than for a buyer to find a new producer for what it needs.

Edit to add: If we look at the ratio "Exports/Imports", we have about 0.3 for the USA with China, and we have about 3.3 for China with the USA.

[–] yogthos@lemmy.ml -1 points 1 year ago

yup