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Observer
05-07-2025
- Business
- Observer
Why China isn't lecturing trump about his costly bill
Berry Wang The writer is a researcher and a reporter for The New York Times As one of the largest holders of US debt for the past two decades, China has not shied away from lecturing the United States about its financial behaviour. Like a parent scolding a child for racking up credit card bills, China needled Washington to protect its assets during the 2013 debt ceiling impasse and blamed Americans for setting off the 2008 global financial crisis with their profligate spending. But as American lawmakers debated and ultimately passed, a giant domestic bill championed by President Donald Trump that is projected to add more than $3 trillion to the federal debt by 2034, China has remained largely silent despite the potential long-term risk it poses to its holdings. China's main concerns about its holdings has long been over the dollar's value and whether the United States will fail to pay its obligations, said Yasheng Huang, an economist at the Massachusetts Institute of Technology. 'These two concerns are far more material today,' he said. 'The dollar has already depreciated, dragging down the Chinese holdings. In terms of the other concern, I personally do not trust this administration to uphold rule of law and debt obligations'. In covering the debate, Chinese state media have emphasised how divisive the bill has been and the seeming futility of the American democratic process to reflect popular will. Reports described the debates as a 'political circus,' while Chinese pundits said the vote highlighted 'increasing polarisation' in the United States. But Chinese officials have not yet publicly criticised the Trump administration and could be focused on other considerations. China probably sees no reason to antagonise Trump by publicly criticising his bill when it is in a shaky truce with his administration in a trade war that had earlier seen both sides impose sky-high tariffs on each other's goods. The two sides have agreed to lift certain countermeasures and keep working towards a deal. Momentum may even be building towards a meeting between Trump and China's top leader, Xi Jinping. Beijing, which is trying to revive economic growth, can ill afford an extended trade war. Concerns over its treasury holdings are not top of mind. More pressing are the tariffs and efforts by the Trump administration to persuade other countries to restrict their own trade with China. 'China is still trying to maintain a fragile trade truce with the United States,' said Joe Mazur, an analyst at Trivium, a research firm. 'Criticising Trump's signature piece of legislation could anger him and torpedo recent diplomatic understandings'. Members of Congress give thumbs up as President Donald Trump signs his signature policy bill during a Fourth of July celebration event outside the White House in Washington, on Friday, July 4, 2025. (Valerie Plesch/The New York Times) From China's perspective, rather than fuel American economic growth, the measure could push Washington closer to a fiscal cliff and undermine its ability to compete with Beijing. 'The chances of Trump's success are at best uncertain,' said Shen Dingli, a scholar of international relations in Shanghai. Instead, the measure 'could indirectly help make China great again' by weakening the United States, he said. Crises and chaos in the United States feed into one of Xi's primary assertions about the state of the world, that the East is rising and the West is declining. China has highlighted the Trump administration's alienation of US allies and partners and disregard for global norms. On social media, one popular hashtag read: 'Big, Beautiful Bill will make 17 million people lose their health insurance'. Internet commenters also cheered on Elon Musk, who has described the bill as 'insane'. In contrast, Chinese analysts said, China has raised its debt levels, in part, to build infrastructure and to loan money to developing countries — spending that is geared towards expanding China's influence. China is also struggling with a growing mountain of debt because of borrowing by local governments, their investment vehicles and real estate developers. Yao Yang, an economist at Peking University, was skeptical that China stood to gain from any disruption caused by Trump's bill. He said the United States could continue to borrow for years to come as long as it remained the world's biggest consumer market. 'America's financial dominance can't be easily overturned and the same goes for the dollar's supremacy,' he said. Beijing has long complained that Washington has printed more money to serve its domestic needs without considering how it devalues the dollar and, by extension, foreign countries' holdings of US assets. But it has also been gradually reducing its holdings of US Treasury bonds, from a peak of $1.3 trillion more than a decade ago, to about $750 billion now, investing instead in other assets like gold. China is also invested in weakening what it calls the US dollar's hegemony as the world's leading currency for trade. That power fuels the world's dependency on American consumers, making major exporting nations like China 'more submissive' to the United States because of the threats of tariffs, said Henry Huiyao Wang, president of the Center for China and Globalization in Beijing. 'The United States is using the greenback and its large deficit financing to sustain its global power,' he said.
Indian Express
04-07-2025
- Business
- Indian Express
Why China isn't lecturing Trump about his costly bill
As one of the largest holders of US debt for the past two decades, China has not shied away from lecturing the United States about its financial behavior. Like a parent scolding a child for racking up credit card bills, China needled Washington to protect its assets during the 2013 debt ceiling impasse and blamed Americans for setting off the 2008 global financial crisis with their profligate spending. But as American lawmakers debated, and ultimately passed, a giant domestic bill championed by President Donald Trump that is projected to add more than $3 trillion to the federal debt by 2034, China has remained largely silent despite the potential long-term risk it poses to its holdings. China's main concerns about its holdings has long been over the dollar's value and whether the United States will fail to pay its obligations, said Yasheng Huang, an economist at the Massachusetts Institute of Technology. 'These two concerns are far more material today,' he said. 'The dollar has already depreciated, dragging down the Chinese holdings. In terms of the other concern, I personally do not trust this administration to uphold rule of law and debt obligations.' In covering the debate, Chinese state media have emphasized how divisive the bill has been and the seeming futility of the American democratic process to reflect popular will. Reports described the debates as a 'political circus,' while Chinese pundits said the vote highlighted 'increasing polarization' in the United States. But Chinese officials have not yet publicly criticized the Trump administration and could be focused on other considerations. China probably sees no reason to antagonize Trump by publicly criticizing his bill when it is in a shaky truce with his administration in a trade war that had earlier seen both sides impose sky-high tariffs on each other's goods. The two sides have agreed to lift certain countermeasures, and keep working toward a deal. Momentum may even be building toward a meeting between Trump and China's top leader, Xi Jinping. Beijing, which is trying to revive economic growth, can ill afford an extended trade war. Concerns over its treasury holdings are not top of mind. More pressing are the tariffs and efforts by the Trump administration to persuade other countries to restrict their own trade with China. 'China is still trying to maintain a fragile trade truce with the United States,' said Joe Mazur, an analyst at Trivium, a research firm. 'Criticizing Trump's signature piece of legislation could anger him and torpedo recent diplomatic understandings.' From China's perspective, rather than fuel American economic growth, the measure could push Washington closer to a fiscal cliff and undermine its ability to compete with Beijing. 'The chances of Trump's success are at best uncertain,' said Shen Dingli, a scholar of international relations in Shanghai. Instead, the measure 'could indirectly help make China great again' by weakening the United States, he said. Crises and chaos in the United States feed into one of Xi's primary assertions about the state of the world, that the East is rising and the West is declining. China has highlighted the Trump administration's alienation of US allies and partners and disregard for global norms. On social media, one popular hashtag read: 'Big, Beautiful Bill will make 17 million people lose their health insurance.' Internet commenters also cheered on Elon Musk, who has described the bill as 'insane.' In contrast, Chinese analysts said, China has raised its debt levels, in part, to build infrastructure and to loan money to developing countries — spending that is geared toward expanding China's influence. China is also struggling with a growing mountain of debt because of borrowing by local governments, their investment vehicles and real estate developers. Yao Yang, an economist at Peking University, was skeptical that China stood to gain from any disruption caused by Trump's bill. He said the United States could continue to borrow for years to come as long as it remained the world's biggest consumer market. 'America's financial dominance can't be easily overturned, and the same goes for the dollar's supremacy,' he said. Beijing has long complained that Washington has printed more money to serve its domestic needs without considering how it devalues the dollar, and, by extension, foreign countries' holdings of US assets. But it has also been gradually reducing its holdings of US Treasury bonds, from a peak of $1.3 trillion more than a decade ago, to about $750 billion now, investing instead in other assets like gold. China is also invested in weakening what it calls the US dollar's hegemony as the world's leading currency for trade. That power fuels the world's dependency on American consumers, making major exporting nations like China 'more submissive' to the United States because of the threats of tariffs, said Henry Huiyao Wang, president of the Center for China and Globalization in Beijing. 'The United States is using the greenback and its large deficit financing to sustain its global power,' he said.
Time of India
04-07-2025
- Business
- Time of India
Why China isn't lecturing Trump about his costly bill
As one of the largest holders of U.S. debt for the past two decades, China has not shied away from lecturing the United States about its financial behavior. Like a parent scolding a child for racking up credit card bills, China needled Washington to protect its assets during the 2013 debt ceiling impasse and blamed Americans for setting off the 2008 global financial crisis with their profligate spending. But as American lawmakers debated, and ultimately passed, a giant domestic bill championed by President Donald Trump that is projected to add more than $3 trillion to the federal debt by 2034, China has remained largely silent despite the potential long-term risk it poses to its holdings. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like One of the Most Successful Investors of All Time, Warren Buffett, Recommends: 5 Books for Turning... Blinkist: Warren Buffett's Reading List Click Here Undo China's main concerns about its holdings has long been over the dollar's value and whether the United States will fail to pay its obligations, said Yasheng Huang, an economist at the Massachusetts Institute of Technology. "These two concerns are far more material today," he said. "The dollar has already depreciated, dragging down the Chinese holdings. In terms of the other concern, I personally do not trust this administration to uphold rule of law and debt obligations." Live Events In covering the debate, Chinese state media have emphasized how divisive the bill has been and the seeming futility of the American democratic process to reflect popular will. Reports described the debates as a "political circus," while Chinese pundits said the vote highlighted "increasing polarization" in the United States. But Chinese officials have not yet publicly criticized the Trump administration and could be focused on other considerations. Averting a Trade War Is a Priority China probably sees no reason to antagonize Trump by publicly criticizing his bill when it is in a shaky truce with his administration in a trade war that had earlier seen both sides impose sky-high tariffs on each other's goods. The two sides have agreed to lift certain countermeasures, and keep working toward a deal. Momentum may even be building toward a meeting between Trump and China's top leader, Xi Jinping. Beijing, which is trying to revive economic growth, can ill afford an extended trade war. Concerns over its treasury holdings are not top of mind. More pressing are the tariffs and efforts by the Trump administration to persuade other countries to restrict their own trade with China. "China is still trying to maintain a fragile trade truce with the United States," said Joe Mazur, an analyst at Trivium, a research firm. "Criticizing Trump's signature piece of legislation could anger him and torpedo recent diplomatic understandings." Why Interrupt Your Enemy's Mistake? From China's perspective, rather than fuel American economic growth, the measure could push Washington closer to a fiscal cliff and undermine its ability to compete with Beijing. "The chances of Trump's success are at best uncertain," said Shen Dingli, a scholar of international relations in Shanghai. Instead, the measure "could indirectly help make China great again" by weakening the United States, he said. Crises and chaos in the United States feed into one of Xi's primary assertions about the state of the world, that the East is rising and the West is declining. China has highlighted the Trump administration's alienation of U.S. allies and partners and disregard for global norms. On social media, one popular hashtag read: "Big, Beautiful Bill will make 17 million people lose their health insurance." Internet commenters also cheered on Elon Musk, who has described the bill as "insane." In contrast, Chinese analysts said, China has raised its debt levels, in part, to build infrastructure and to loan money to developing countries -- spending that is geared toward expanding China's influence. China is also struggling with a growing mountain of debt because of borrowing by local governments, their investment vehicles and real estate developers. Yao Yang, an economist at Peking University, was skeptical that China stood to gain from any disruption caused by Trump's bill. He said the United States could continue to borrow for years to come as long as it remained the world's biggest consumer market. "America's financial dominance can't be easily overturned, and the same goes for the dollar's supremacy," he said. China Is Less Exposed to U.S. Debt Beijing has long complained that Washington has printed more money to serve its domestic needs without considering how it devalues the dollar, and, by extension, foreign countries' holdings of U.S. assets. But it has also been gradually reducing its holdings of U.S. Treasury bonds, from a peak of $1.3 trillion more than a decade ago, to about $750 billion now, investing instead in other assets like gold. China is also invested in weakening what it calls the U.S. dollar's hegemony as the world's leading currency for trade. That power fuels the world's dependency on American consumers, making major exporting nations like China "more submissive" to the United States because of the threats of tariffs, said Henry Huiyao Wang, president of the Center for China and Globalization in Beijing. "The United States is using the greenback and its large deficit financing to sustain its global power," he said. This article originally appeared in The New York Times.
Yahoo
15-05-2025
- Business
- Yahoo
Bond vigilantes star down Trump's ‘big beautiful bill'
US government borrowing costs rose to levels above the selloff that followed President Donald Trump's 'Liberation Day' tariffs last month, driven by traders worried by Republicans' 'big beautiful bill' that promises tax cuts far deeper than spending curbs. Yields on 10-year Treasury bonds topped 4.5% on Wednesday — higher even than the borrowing costs that partly drove Trump to suspend his tariffs — on fears that higher inflation will delay interest-rate cuts and that growing deficits will force a new round of borrowing, ballooning the already worrisome national debt. Bond investors are mutinous again. US government bonds sold off sharply in response to Trump's tax and spending bill, raising fears that the US is in for its own 'Liz Truss moment.' The UK prime minister was bounced from office in 2022 after proposing a budget that cut taxes far more than it cut spending — sowing fears that the government would have to borrow heavily to close the gap. Investors dumped their bonds and (aided by poor risk management in an arcane corner of the pension system) set off a gilt crisis. Republicans' 'Big, Beautiful Bill' likewise cuts taxes more deeply than spending, and nonpartisan congressional accountants expect it to add $3.3 trillion to the national debt by 2034. Bondholders don't want to be bagholders, and there were already worries about declining demand for Treasury bonds. One market veteran told Bloomberg that 'it may be necessary to have a repeat' of the UK crisis 'to force everyone to do the right thing' and get serious about fiscal discipline. As Semafor's politics team has reported, the bill faces opposition from enough Republicans to sink it. 'I'd be really seriously concerned on what the actual Plan B is, because I haven't heard about it,' said Rep. Cory Mills, R-Fla. The long-term fallout of a Truss-like episode shouldn't be underestimated, though: UK government bonds have underperformed rich-country peers since 2022, Goldman Sachs said in a note to clients yesterday. 'The experience of Gilts after the mini-crisis offers important lessons… as the US economy now exhibits a worse trade-off with low growth and high inflation,' the bank's economists wrote. The US isn't the only major economy where borrowing is in the spotlight: China's net new issuance of government bonds is expanding at its fastest rate in a year, according to central bank data. The China-focused research firm Trivium noted that much of that growth was down to the government refinancing loans issued by local-government financing vehicles, which sit at the epicenter of what many analysts fear is a mountain of opaque borrowing. (The flip side is all this refinancing also 'obscures whether firms' demand for credit is rising or falling,' Trivium analysts added.) Bloomberg's John Authers buys the theory that 'Trump has given up on a certain kind of 2.0 radicalism, and will now follow his 1.0 model,' meaning tax cuts and appeasing the stock market. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Perth Now
14-05-2025
- Entertainment
- Perth Now
Trivium slam Bullet For My Valentine as Matt Tuck pulls plug on co-headline tour early
Trivium's bassist Paolo Gregoletto has accused Bullet For My Valentine frontman Matt Tuck of having "no respect for us or our crew" after he pulled out of their joint tour early. The two bands have played across Europe and North America in celebration of the 20th anniversaries of their 2005 albums 'The Poison' and 'Ascendancy'. They were due to head to Australia and South America after they wrap the North American leg, but according to Trivium, Matt no longer wants to do it. During a TikTok Live, Paolo said: 'Matt Tuck didn't want to do it, after we had planned it, after stuff was already in the works – don't know why. I think it would have been amazing. I think The Poison is a great album. I think the two records pair very well together. And I think it would have been nice to give everyone around the world a chance to see the two together.' In another TikTok, he captioned the clip: 'When you make your first TikTok live and p*** off the other band you are on tour with… #JusticeForSouthAmerica'. One person commented suggested they should have dealt with the situation in private, Gregoletto replied: 'He's the sole decision maker of the band and he has no respect for us or our crew.' Trivium frontman Matt Heafy told Metal Hammer of the joint tour: "For [BFMV frontman Matt Tuck] and I, these records in 2005 changed our lives. But we were only really able to see the impact 10, 15, 20 years later. "A lot of the coolest metal bands that I love these days, I'll talk to them and they'll, say, 'Trivium was my first live band I ever saw'. OR they'll say 'Ascendancy' or 'The Poison' was their first record. That's so cool." Heafy added: "It almost feels like a once in a lifetime experience. A five-year or 10-year anniversary, that's cool. "But we knew we wanted to really hold on to this. 'We've never done anything like it, so let's wait for 20 years.' It's something special for sure."
