Watching how the trade war is unfolding..... and adding to my post above about how this allows China more scope to advance its agenda.... these are some of the possibilities that I can think of...
Recently... China started pricing oil futures in Yuan ... they have yet to sway Saudi Arabia into ditching the $US, in a trade war scenario China will be aiming to decouple as many US allies as it can ... so getting all of its oil imports priced in Yuan will be right at the top of the agenda. The more it can do that the more UST's China can sell.
Long term...imo... it doesn't stop there. China will be wanting other commodities to be priced in Yuan. In the last couple of years we have seen China apply direct pressure to Australia .... it does so for a reason, we are one of the US' key allies. China weakens the US if they can wedge its alliances. At some point in the future China will want to buy coal and iron ore priced in Yuan .... in a trade war scenario they might fast track that. What is Australia going to say or do if that request [demand] comes through? RIO and BHP are in direct competition with Vale and there is some scope for China to play one off against the other. About 18 months ago all of the necessary paperwork was completed for $Aus and Yuan currency swaps so the regulatory hurdles have been removed. The real short term purpose will be to weaken the US political position... and the more that China can buy using its own currency the less it needs UST's.
China has spent the last several years buying up key assets around the World ... heavily invested in Africa ... again they will be agitating for transactions to be completed using the Yuan. Trump is about to visit the South American countries ... where the battle for hearts and minds will be on in earnest .... Both the US and China will be asking these countries, which side are you on?? ... could be some interesting answers.
The face-to-face meeting of Trump with Kim is penciled in a few weeks from now. China has far more sway over Nth Korea than the US will ever have .... in a trade war environment Nth Korea will do exactly what China tells it to do.
Lastly... China can dictate to its population and mostly they will obey ... in the spirit of national defence in a trade war I think we can soon expect that China issues the edict that its citizens actively boycott US made items in the domestic economy. Also, in one of the articles doing the rounds tonight, China seems to have made vague threats against US companies with operations on mainland China ... nothing specific but enough to indicate they have a variety of options to fight Trump.
(20min delay)