Living in Interesting Times: The Economics of a Chinese Currency Attack

Authors

Jeffrey E. Haymond, Cedarville UniversityFollow

Document Type

Article

Publication Date

Winter 2008

Journal Title

Strategic Studies Quarterly

First Page

84

Last Page

105

Abstract

Several large near-peer competitors, such as Russia and China, have amassed large levels of dollar-denominated foreign exchange reserves. This raises concern that these states could deliberately sell off assets to harm the dollar’s value. Currency attacks have historically been a part of warfare, and the recent advent of nation-states that have large reserves suggests it is possible the United States could face this threat. Contemporary public discussion has often lacked depth and been at one of two extremes: either (1) China could destroy the United States if it chose to sell off its treasuries, or (2) the Chinese would lose so much they would never undertake a currency attack. This article takes a detailed look at China’s economy to determine the plausibility of a currency attack against the United States.

Keywords

China, currency

Recommended Citation

Haymond, Jeffrey E., "Living in Interesting Times: The Economics of a Chinese Currency Attack" (2008). Business Administration Faculty Publications. 17.
https://digitalcommons.cedarville.edu/business_administration_publications/17