China Review News republished an article from Jiefang Daily, a newspaper of the Shanghai Committee of the Communist Party of China, titled, “Chinese Think Tank Warns: The US Will Surely Lose If a China-U.S. Trade War Breaks Out.”
“The Ways and Means Committee of the U.S. House of Representatives held a two-day hearing on September 15 to discuss the RMB exchange rate in an attempt to exert pressure for RMB appreciation.”
“Ding Yifan, Deputy Director of the Institute of World Development (IWD) under the Development Research Center of China’s State Council (DRC), said that once the United States deliberately imposes economic sanctions on China, China can respond by selling its holdings of U.S. debt. At present, China is still the biggest holder of U.S. Treasury bonds. If China sells off its holdings, the domestic interest rates of U.S. banks will increase."
Source: China Review News, September 17, 2010