What are you smoking? They demanded that kind of money, and Bush threw a tiny fraction of it at 'em, which, with their "face" oriented culture was a direct slap to the face.
China lost face by getting that payment, bigtime. They lost a hell of a lot more face than they would have if Bush flat-out refused to pay them at all.
They stood there and demanded Fort Knox, and we tossed a pair of nickels at 'em and said "shove it up your a$$" as we turned away and left.