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Effects of the trade war: Chinese selling US assets

Summary:
As the trade war with China heats up, we begin to see its effects: highly leveraged Chinese firms are being forced to sell US assets so that they have enough money to service debt, especially as they earn less from trade with the US. The government’s dramatic about-face from encouraging aggressive overseas acquisitions to cracking down on risky lending and overseas transfers underscores worries over the risk that the nation could run short of enough US dollars to make the interest and principal payments on its mounting debt at a time when the current account balance is coming under pressure. HT:  MarginalRevolution.com

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As the trade war with China heats up, we begin to see its effects: highly leveraged Chinese firms are being forced to sell US assets so that they have enough money to service debt, especially as they earn less from trade with the US.
The government’s dramatic about-face from encouraging aggressive overseas acquisitions to cracking down on risky lending and overseas transfers underscores worries over the risk that the nation could run short of enough US dollars to make the interest and principal payments on its mounting debt at a time when the current account balance is coming under pressure.

HT:  MarginalRevolution.com

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