The relationship between China and the United States is no longer balanced, which may explain the tensions

Under the so-called “Bretton Woods 2” system, the relationship between China and the United States was balanced: China lent the United States the sums to finance its external deficit with China. This relationship was good for both countries, as the United States was able to buy more Chinese products and China was able to sell more to the United States by financing it. But since 2013, China has no longer financed the United States, due to the decline in its external surplus and capital outflows. As the US external deficit has continued to grow, the relationship between China and the United States has become imbalanced as China no longer finances its deficit. This imbalance may explain the growing tensions between China and the United States.