China How will China react to constant provocation by America?
America continue to provoke China by taking childish actions, such as inviting Taiwan to the Summit for Democracy and instigating a diplomatic boycott of the Beijing Winter Olympics.

China has promised strong retaliatory actions. 

I make the following guess on the actions that China will take after the conclusion of the Olympics on 20 February 2022:

a) Negotiations on the restoration of trade will be difficult and slow.
b) China will stop buying US Treasuries and will not refinance the Treasuries on their redemption.
c) China will move speedily to the use of the digital yuan (e-CNY) in international trade, to replace the United States Dollar
d) There will be further supply chain disruptions, especially of rare earth materials and other components that are critical to US high tech manufacture.

These actions will be gradual and will become more painful as the months passed.

When the Biden Administration realize the magnitude of these challenges and start to change their rhetoric, it will take a long time to reverse the harmful effects. 

In November 2022, the Democratic Party will lose several seats in Congress. President Biden will be a lame duck for the remainder of his term.

These actions will also impact China negatively, but China is in a stronger position to take the pain. 

Tan Kin Lian

 

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