Trade tensions between Washington and Beijing have fixed all eyes on China’s large goods trade surplus with the US. But while the likelihood of an outright trade war is hard to gauge, largely overlooked is another threat arriving with near certainty — the end of China’s large current account surplus.

Without those large surpluses, China is likely to cut back its purchases of US financial assets, just as Treasury bond issuance surges and corporate America needs to refinance more of its debt.

For 25 years, China has posted big surpluses on its current account (the balance of goods and services, plus net investment income). But years ahead promise smaller surpluses or even deficits. This means China’s demand for US Treasuries and corporate bonds could stagnate or even decline.