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Roach Sees China Treasury Sales as `Last Defense' in Trade Fight

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Roach says the U.S. has committed a serious policy blunder motivated by politics and not economics.(Source: Bloomberg)

Selling U.S. Treasuries would be China’s “last defense” if the White House pushes Beijing too hard on trade, said Stephen Roach, former non-executive chairman for Morgan Stanley Asia.

“The Chinese side knows this is an option they have,” Roach said in a Bloomberg Television interview on the sidelines of the China Development Forum in Beijing. “If we keep pushing China, and clearly threatening to damage their economy and their growth outlook, China will view this is an active economic war and respond in kind.”