Treasury Secretary Scott Bessent has said that China couldn’t sell U.S. Treasuries to destabilize the financial markets, as it would affect their economy by weakening their currency.
What Happened: Bessent, while speaking to Yahoo Finance, reiterated that there was no purpose for China to “weaponize” the U.S. Treasuries, as such a move could affect China’s own economy.
“If they started selling Treasuries, they’d have an effect on the price. But more importantly, they accumulate dollars, and what are they gonna do with the dollars?” asked Bessent.
“So if they sell Treasuries, then they would have to sell RMB, and it would strengthen their currency, and they’ve been doing just the opposite. They’ve had a weak RMB or Yuan policy. So, it really serves no purpose for them to weaponize Treasuries.”
China is an export-oriented economy that manufactures many goods and services on its soil. The export-oriented economies generally benefit from a weaker currency. A weaker currency makes a country’s exports more competitive in the global market by making them cheaper for foreign buyers. This can lead to increased demand for exports, potentially boosting economic growth and creating jobs.
When asked if China still decides to sell U.S. Treasuries regardless of the effect on their currency, Bessent …