Consequences of Yuan appreciation

  I doubt Yuan appreciation would ever cause Chinese exports to become less competitive than the united states. However, it is very possible for Yuan appreciation to cause Chinese exports to become less competitive compared against nations like Vietnam and members of the ASEAN. Since they maybe more willing to produce the same product for even less reward than the Chinese.

  But none of that is strategically important to China. If ASEAN is willing to export its undervalued products to China in exchange for the Yuan and Yuan bonds, China would be getting something for nothing. What is strategic to China's economy isnt trade revenue, but military spending. China's foreign debt could become 100 trillion dollars equivalent. But what nation in the world could ever force China to pay it? Not only is forcefully collecting debt no longer accepted as a social norm. But even if we returned to 19th century gunboat diplomacy where armies marched against foreign countries to collect on debt. What nation is willing to take a nuke to their capital to collect debt from China?

In 1902 the Venezuelan government defaults on its interest payments to Britain, Germany and Italy. All three send warships to bombard the Venezuelan coast. In 1903 Germany threatens to collect a debt in the same way from the Dominican Republic.

 Currently, China is the world's largest creditor, so if anyone is going to be hiring debt collectors, it would be China. But assuming a hypothetical reversal in reality. What difference would it make?