Aug 9, 2007
China 'will dump dollars' if US imposes trade curbs
THE Chinese government has threatened to liquidate its huge holdings of US
dollars, if Washington imposes trade sanctions to force Beijing to revalue
the yuan, a report said yesterday.

Two top Chinese officials in recent days have said that China could use its
US$1.33 trillion (S$2 trillion) worth of foreign reserves to counter
congressional pressure on Beijing to revalue the yuan, Britain's The
Telegraph reported yesterday.

This plan, referred to as China's 'nuclear option' in the Chinese media,
could trigger a collapse of the greenback at a time when it is already
weakened.

There is also worry that this will cause a peak in US bond yields,
potentially throwing the United States into recession, the paper reported.

Mr Xia Bin, finance chief at the Development Research Centre - a Cabinet
rank position - launched what now appears to be government policy, with a
comment last week that Beijing's foreign reserves should be used as a
'bargaining chip' in talks with the US.

On Aug 11, 4:00 am, "Bishop" fake.org> wrote: