How is China going to pay off their national debt?
So we know that the USA can only avoid paying their debt because the USD is the world reserve currency, but once they actually have to pay it, it's going to be hell.
How is China going to deal with their own debt? Because it seems like they have a lot to pay back.
You're viewing a single thread.
China is just like the US in that it has fiat monetary sovereignty, so it can always pay any debt denominated in its own currency by simply willing it into existence. The deficit is simply sum total of money the state has created via spending minus the money it has destroyed via taxation. If it has significant debt in other countries’ currencies, that’s another matter, but I don’t think it has that problem.
But if they will that money into existence, that would make the Yuan less valuable and lead to inflation.
It can if they spend enough of it without taxing any of it back out. However the relationship between the money injected into the economy and inflation is not as inevitable, mechanical, nor 1:1 as neoclassical economists claim. Finding the Money explains this a bit.
Another common trope is “hyperinflation,” which the PEGS Institute also dispels: What Caused Hyperinflation In Weimar, Zimbabwe And Venezuela?
I found a YouTube link in your comment. Here are links to the same video on alternative frontends that protect your privacy:
I found YouTube links in your comment. Here are links to the same videos on alternative frontends that protect your privacy:
Link 1:
Link 2: