China has run a huge trade surplus for years. The additional funds collected were used to buy US bonds. We sell them to anybody, and China liked them because they have traditionally been the safest investment on earth.
It also helped buoy the US economy, which increased China's trade surplus, which helped them buy more bonds. Now they are sitting on about 800 billion dollars worth of them.
Be interested if you have a source for the $800 Billion number. I thought it was quite a bit...50% more - around 1.2 Trillion.
Maybe it's just me, but these days anything less than a Trillion seems almost....well, trivial. It's the Obama effect.
Thanks for the info.
Was it wise, I wonder, to sell US bonds to China ?