In the delicate balance of the global economy, every interaction between the two major economies of China and the United States is enough to cause an uproar in the market.
Recently, a confrontation over trade policy and financial assets has once again pushed the relationship between the two countries to the forefront.
On May 14, U.S. President Joe Biden plans to wave tariffs on a range of Chinese goods, including electric vehicles, photovoltaic products and medical products, according to a report by Huanqiu.com, which undoubtedly puts more pressure on the already fragile global trading system.
In the prelude to this trade dispute, U.S. Treasury Secretary Janet Yellen came out on the 13th to try to calm the market's uneasiness, emphasizing that the United States does not seek complete decoupling from China, but at the same time insists on the principle of ensuring "fair competition".
Yellen's rhetoric exudes ambivalent sentiments — expressing both a willingness to cooperate with China and a strong assertion that it will limit China's development in key technology areas such as semiconductors and clean energy.
This delicate balancing act seems to be intended to leave room for manoeuvre in possible subsequent trade frictions.
She also expressed concern about possible countermeasures from China, expecting restraint but realizing that it was only an idealistic expectation.
In the face of the U.S. tariff offensive, China responded quickly and resolutely.
China has made it clear that the sharp increase in tariffs on electric vehicles (jumping from 27.5% to 102.5%) effectively closes the door for Chinese electric vehicles to enter the United States, while tariffs will also increase significantly for photovoltaic products and other medical equipment.
It is worth noting that the United States has not imposed tariffs on its own production equipment for solar panel modules, which undoubtedly exposes its true protectionist intentions.
Chinese Foreign Ministry spokesman Wang Wenbin reiterated that China will take all necessary actions to defend its legitimate rights and interests, demonstrating determination that should not be underestimated.
In the context of escalating economic and trade frictions, China's recent series of financial operations are even more eye-catching.
According to reports, China, the second largest overseas holder of U.S. Treasury bonds, has reduced its holdings of U.S. Treasuries for three consecutive months since the beginning of 2024, with total holdings falling to a 15-year low, including a decrease of $7.6 billion in March.
China's strategy of reducing its holdings of U.S. bonds appears to be cautious and strong, avoiding market turmoil by not renewing maturing bonds and sending a clear signal to the U.S. that China has the financial leverage to counter U.S. protectionist measures.
China's Ministry of Commerce expressed strong dissatisfaction with this, warning the United States to immediately correct its erroneous trade policy.
On Chinese social media, Hua Chunying sharply exposed the double standards of the United States in international trade, pointing out that the United States subsidizes its own industries and glorifies them as strategic behaviors, while similar practices of other countries are labeled as "unfair competition", and this naked double standard behavior has nowhere to hide on the international stage.
The U.S. move to impose tariffs on China has been widely interpreted as a form of bullying, and China has vowed to respond by effective means, not only to protect its own economic interests, but also to uphold the principles of global free trade.
China's reduction of its holdings of U.S. Treasury bonds is both a prudent assessment of the U.S. economic outlook and a direct response to U.S. trade protectionism, a move that undoubtedly deepens the complex financial game between China and the United States, and indicates increased uncertainty in the future of the relationship between the two countries.
This trade and financial confrontation between China and the United States not only tests the wisdom and endurance of both sides, but also arouses widespread attention around the world.
In today's world economic integration, how to find a balance between competition and cooperation and prevent trade disputes from escalating into full-scale economic conflicts has become a major challenge facing China, the United States and the world.
The outcome of this contest will have a direct impact on the stability of the global industrial chain, the sentiment of the financial market, and the direction of future international cooperation.