One thing that I don't see mentioned often enough in discussions about China's US debt holdings is how much they actually hold. It's less than 10% of the total US debt, and about a quarter of all foreign-held debt. [1]
They are still the biggest foreign owner of US debt, but the majority of treasuries are owned by US entities (households, corporations, state and local governments, the social security trust, and government agencies that purchase treasuries when they have excess revenue). Of course I would count the Fed's massive holding of treasuries as separate from all of this, and there is plenty to worry about with our debt situation. My point is that China is far from "owning" the US.
They are still the biggest foreign owner of US debt, but the majority of treasuries are owned by US entities (households, corporations, state and local governments, the social security trust, and government agencies that purchase treasuries when they have excess revenue). Of course I would count the Fed's massive holding of treasuries as separate from all of this, and there is plenty to worry about with our debt situation. My point is that China is far from "owning" the US.
[1] http://www.treasury.gov/resource-center/data-chart-center/ti...