Recently a friend speculated about China somehow calling in its loans to the US. Well, the US government does not owe debts that are callable by the creditors. It issues bonds, and the US gov't is in the driver's seat when it comes to those bonds. If there are any callable bonds, they are callable by the US government.
What we are doing with our trade with China may be akin to selling off inherited wealth to buy stuff and becoming indebted for consumer goods, but none of this (by itself) puts China in control of us. If anything, China becomes invested in our continued ability to repay these debts. If China starts a war and we end up on the other side, the first thing our governmnet will do is seize Chinese assets, including China's US bonds. Being the generous folks we are, we would probably let them have the bonds back after the war (if we win), and start paying interest again. Heck, we would probably pay interest into escrow accounts and pay the interest after the war, along with rebuilding their country.
The only problem with this analysis is that it presumes that China's leaders are rational or reasonable. If their power is ever threatened by domestic unrest, and they need a war (say, a quick victory against Taiwan) to sew up support, then all best are off. Holding power comes above all else. I would not count on Chinese leaders to ever do what Gorbachev and his ilk did, letting go of power.
"China becomes invested in our continued ability to repay these debts."
In my first post on this thread I just didn't feel like trying to impart some economic knowledge to somebody who posted as they did. But you are right. China is too entangled with us and us them for either one to do drastic measures with each other. I do think the US is wrong for pushing the Chinese on raising their yaun higher because it just might cause the Chinese to sell off however billions of dollars of US treasuries which would cause the US dollar to drop. That's where the Chinese have some power over us. But then again they put our economy in a spin and the whole world would go down with it.
I've found a general lack of knowledge of global economics at FR.