Let's start with the facts. China is indeed America's biggest foreign lender. It owns about $1. 2 trillion of debt, more than Japan, the U. K. and Brazil. A little known fact is that most of America's debt, $14. 3 trillion and counting, is actually owned by Americans in social security trusts, pension funds and by the Federal Reserve. But it is the marginal buyer that matters, so China is very important. Now, imagine that China were to sell off those $1. 2 trillion of U. S. Treasury bonds, or even a substantial portion of them. It's a huge hypothetical, but let's play out the disastrous chain of events that would happen if China began to divest. It would trigger panic selling of the dollar. That would, in turn, hurt the U. S. economy, which is China's number one export market. Not a good idea if you are the Beijing government trying to keep your workers occupied in factories across China, producing goods that Americans are going to buy. You see, China is addicted to a strategy of export-led growth, which requires that it keep its goods cheap, which means keeping its currency undervalued, which means buying U. S. dollars. But could China slow the purchase of, of American debt, even if it doesn't stop it altogether? Yes, but, even here, it has fewer options than people think. As China's export growth continues, it will have to keep adding to its foreign reserves, which are now $3. 2 trillion. So where can it park that money? Does it want to invest in Japanese debt and make the yen a reserve currency? Anyone who understands the deep animosity between China and Japan will see that this is unlikely.