Raider,
After having read your last post I came quickly to the conclusion that there was a problem with my understanding of the terms being used by you.
For instance, in the sentence that follows: "its not out of the realms of possibility for china to use its total ( this means all ) of its foreign reserves to pay down its internal debts " the appropriate term to use would have been imo the term internal or domestic or internal public debt. By using the expression "internal debts" I think that it was legitimate for me to have inferred that you were referring to all forms of Chinese debt, both public and private.
In the end what you were trying to say was just something like this: China has all necessary conditions to deal swiftly and effectively with any threat made to its financial system by virtue of its dirigism, the large size of its state owned (nationalized) sector, its ability to organize large scale bailouts, the recent tightening its regulatory frame work and last but not the least its huge amount of foreign reserves coupled with a closed capital account.
https://en.wikipedia.org/wiki/Dirigisme
https://blogs.wsj.com/chinarealtime/2011/12/08/notebook-an-american-meets-china’s-closed-capital-account/
