China’s Flawed Balance-of-Payments Position -
Yu Yongding -
"...The value of China’s assets as future claims on real resources has
already been diluted by dollar depreciation, and calls in the US for
inflating away America’s debt burden portend a further decline.
Moreover, while China may have profited from the rise in government-bond
prices over the last few years, prices have been inflated artificially
by expansionary monetary policy in advanced countries, which implies
that the bubble could burst. Whether through inflation or collapsing
government-bond prices, China will suffer significant capital losses on
its foreign assets, further damaging its investment-income balance..."