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A thought occurs to me. The West owns a number of factories, equity stakes in Chinese firms etc. On the other hand China seems to (at least as it's been presented in the media) hold most of its foreign assets in the form of government debt, notably US Treasuries.
Now, ownership of companies and physical assets like factories is much easier to keep track of than little slips of paper.
In the event that China was to regress to a less open economy and seize the assets of foreign individuals and firms in China would the US gov't have recourse to defaulting on Chinese-held Treasuries (perhaps compensating the owners of the lost assets with this booty) or are the Treasuries held by China anonymous enough (like cash) that the US could not selectively default in any meaningful way?
Basically, I'm ignorant of the actual mechanics whereby China purchases Treasuries. Is ownership recorded on electronic exchanges the world over or is there some sort of Chinese Fort Knox where they have 10 million 100$ notes?
Now, ownership of companies and physical assets like factories is much easier to keep track of than little slips of paper.
In the event that China was to regress to a less open economy and seize the assets of foreign individuals and firms in China would the US gov't have recourse to defaulting on Chinese-held Treasuries (perhaps compensating the owners of the lost assets with this booty) or are the Treasuries held by China anonymous enough (like cash) that the US could not selectively default in any meaningful way?
Basically, I'm ignorant of the actual mechanics whereby China purchases Treasuries. Is ownership recorded on electronic exchanges the world over or is there some sort of Chinese Fort Knox where they have 10 million 100$ notes?
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