This week, Jay Shambaugh, the US Treasury’s undersecretary for international affairs, is leading an official trip to Beijing.  According to Shambaugh, the US delegation will “further our discussions on China’s macroeconomic imbalances and industrial policies that risk causing significant harm to workers and firms in the U.S. and around the world.” (Exclusive | U.S. Officials Jet to Beijing Amid Flood of Cheap Chinese Exports – WSJ)

Shambaugh’s PRC counterparts will take away an unintended message.  They will hear the delegation’s words, but, correctly or not, they will sense deep American fear.

It is laudable to build “a resilient channel to discuss a range of economic topics with our counterparts.”  However, the Treasury Department could protect Americans from predatory Communist Party of China (CPC) behavior more by creating a structure that could raise or lower the cost for American investors to buy Chinese stocks and bonds.

Doing so would put tools for determining the CPC’s cost of capital in American hands.

For context, a rise in the interest rate the US government pays to borrow money is driving the US government to pay more money in interest than it spends on the US military.  Building tools to affect CPC cost of borrowing would reverse the direction of knee-bending, diplomatic travel.