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And, of course, as the Chinese control the major shipping lanes

And of course, being idiots, we are building them a 145 acre terminal at the Port of Los Angeles which lies just past the Vincent Thomas Bridge. Is this a "prime" spot for all kinds of things? The name of the terminal is COSCO (China Ocean Shipping Co.) which just happens to be partly owned by the PLA.

Also, check this out!

http://www1.chinadaily.com.cn/en/doc/2003-11/23/content_283886.htm

China says it will not dump US Treasuries to retaliate ( 2003-11-23 09:28)

China will not retaliate in a developing trade spat with the United States by dumping US Treasuries, a Chinese paper reports, citing the agency in charge of the country's ballooning forex reserves.

"The nature of our agency is to manage the national forex assets well," an unnamed official with State Administration of Foreign Exchange told the China Business newspaper.

"To put it simply, we're looking at profits, and as long as we don't get instructions from the central bank, we won't sell US Treasuries in a bid to retaliate," the official was quoted as saying.

The remarks were made against the backdrop of heated tempers on both sides of the Pacific after the US government, under pressure to protect US jobs, said it would cap imports of Chinese bras.

US Ambassador Clark Randt was called in by Chinese Vice Minister of Commerce Ma Xiuhong for an emergency meeting Thursday to be told the US decision would have a negative impact China-US trade.

China's foreign exchange reserves are the second-largest in the world after Japan's, hitting 383.9 billion dollars by late September.

A large part of this money has been spent buying US Treasuries and other debt instruments, helping to keep American interest rates low.

If China was suddenly to sell off Treasuries, it could potentially cause US interest rates to rise, wreaking significant damage on the US economy.

Could a good portion of Wall Street's problems be traced back here?

looking for Beijing to pay our civil service

You bring up a good point about China's buying US Treasury bonds. The article also warned about China's ending up paying the salaries of U.S. government workers. All this is true right now, however. The U.S. does use the money China paid in buying Treasury bonds to make up the shortfall in its budget (the US budget deficit), which includes things spending on the U.S. military, government workers' salaries, etc. It may be hard to believe, but true nonetheless that the salaries of US soldiers in Iraq is currently being paid in part by Chinese money. What China gets in return, of course, is interest payments on the US Treasury bonds it holds. Unfortunately for America, US budget deficits are projected to be $500 bil. a year for as far as the eye can see, so America will be making interest payments to China for many years to come.