[lelio]

Accusations that China manipulates its currency miss the point. The yuan is pegged to the dollar, which has dropped in value over the past year. So Chinese exports to the U.S. have indeed grown cheaper compared with those of other countries.

They don't entirely miss the point: its not like other countries' prices can come close to the Chinese. And you can't easily start buying your product from another country as rates change.

To support its currency, China holds about $120 billion in U.S. Treasury bonds, thus lending America the money to keep its economy humming (thanks, Beijing, for financing those tax rebates).

When you owe the bank $10k they own you. When you 'owe' the bank $120B you own the bank.