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Japan Buys Chinese Debt for First Time in History!
This week marked yet another historic event in the debt crisis. For the first Japan has agreed to invest in Chinese debt. What truly makes this amazing is that China has to approve all government holders of their bonds. So Japan up to this point has never been approved. China originally approved Japan late last year, but no action has taken place until now.
However, what is truly significant here is that China and Japan are cementing a monetary relationship between their two countries. While the amount of the debt is relatively small, only $10.3 Billion, this is still a massive change in the geopolitical atmosphere in the region. It shows that Japan recognizes China as a growing leader and a need exists to be on good terms. On the other hand, this actions also points to the weakness of the United States as Japan is now looking towards other nations to have their reserves invested in.
China is still establishing its strength as a global leader. In just a few years it will have the largest economy in the world, but until its currency is recognized as one of the main strong currencies in the world, it will always take a back seat next to the United States.
