Because they've been trying to create relatively stable reserves for their banking system. Buying a Buick doesn't improve the balance sheet of a bank trying to have reserves for lending. Their banking system is a horrendous mess though, another reason I'm not worried about the U.S. falling prey to the dragon.
They transparently yearn for Chinese Hegemony. And they will perpetrate any evil, any crime, and as Ronald Reagan said, "reserving to themselves the right to lie, to cheat, and to steal" to get there.
No less tranparently than American neocons like Bill Kristol and his cabal yearn for American hegemony. Our own fiat money system is a crime against Americans, and I can't fault the Chinese for tying themselves directly to our currency to avoid the unmitigated default our government's constant inflation of the money supply represents.
The danger to the US's currency's role as global reserve currency is a better alternative. It's not an accident that since the French and Belgians voted no on the EU constitution gold has risen against all fiat currencies. If the Chinese try to float their currency and discharge their U.S. denominated reserves they'll destroy their economy more effectively than we could with a fleet of bombers. Their best recourse, and one that would threaten the dollar's position in global trade, is to tie themselves to gold, but since that would remove the ability of the leadership to manipulate the currency to the advantage of themselves and cronies, I don't see it happening.
They wish to steal those very surviving industries for themselves. Hence they are very careful to only buy American manufactured goods and machine tools that are at distressed prices...such as auctions of defunct manufacturing plants, Chapter 11 sell-offs, or Chap. 7 liquidations.
Then why are they willingly paying a 2 billion dollar premium on the value of Unocal? Is it in bankruptcy? The purchase of distressed company's assets isn't unique to China. If they can make profitable use of the equipment, the world benefits.
But they did rather deliberately, and knowingly, enable the consumption binge. By buying those Treasuries, it financed the deficits with the debt purchases, and like a credit-card junky we kept on increasing the spending rather than pulling back.
Again, they were trying to establish their own supply of stable banking reserves. The Chinese aren't responsible for the lion's share of financing U.S. debt. The Japanese have been picking up that tab, in a bid to reflate their own economy. You can read more about it here, it's pretty interesting, especially with that madman Bernanke poised to replace Greenspan.
The "enemy within" of a runaway government you fear would be constitutionally curtailed. And the "enemy without" would similarly see its plans foiled. By the Power of the People being asserted at the last instant to save the Republic.
While we're dreaming, let's return the currency to a solid footing. Link the dollar to weight in gold as done originally, and undone to finance the socialist dreams of FDR. Ditch the Federal Reserve for creating the credit environment (afterall, it has authority to monetize Federal debt, so you can't blame foreigners for funding our debt, the Federal Reserve can print till its heart's content to buy U.S. debt) that has every man woman and child in the nation staring at $100,000 in debt.
I'd be happy to see income tax abolished. Get rid of SSI, Medicare, and Medicaid in the same fell swoop. If States want to tax their citizens to provide these services, they are of course empowered to do so, but people will be able to escape those States with their property.
I have concerns about the nature of the sales tax proposed. I can't see how it results in a less intrusive government. I'd prefer the federal government collect it's direct taxes via capitation from the States. Perhaps even better would be to have the federal government collect them directly. But no 'emergency withholding' (as instituted in the midst of WW2), instead citizens write out their payment in full on the first Monday in November. The tax ID can serve as their voter identification on the following Tuesday...
If that were so, then they would abolish their communist system. They don't and won't. And if they were serious about "relatively stable reserves" then they wouldn't park them in the U.S. currency...which they know their parasitic trade flows has seriously weakened. Nor would they also, if so financially constrained, be able to be simultaneously deploying 800 IRBMs across the Strait of Taiwan this last decade. Nor deploying the new Yuan class attack sub. Or the DF-31 ICBM, or the JL-2 SLBM.
Their banking system is a horrendous mess though, another reason I'm not worried about the U.S. falling prey to the dragon.
Their banking system is a front operation for the Party. Of course its a mess. They funnel the country's net profits through the banks to shore up their municipal and state industries. They periodically kick in $120 billion or so to keep the edifice going. Looks like they are going to do the same thing with their "stock market" as well. But it means nothing, because they will have the lion's share of the world's industries located in their grasp when the balloon goes up.