As of today, the U.S. national debt is $11+ trillion. When the U.S. media talk about this debt within the context of U.S.-China relations, they usually talk about trade imbalance, currency manipulation, and anxiety over whether China is going to dump her treasury holdings and trigger a collapse of the USD.
I’d like to share with you some graphs (based on numbers I got mostly through Wikipedia, and I believe their “ballpark” to be about right):
With the U.S. bailouts, Obama’s plan will add $1.7 trillion to the U.S. national debt, bringing the total to $13 trillion by the end of 2009.
China and Japan are two of the top holders of U.S. debt. Rest of the debt are held by oil producing countries, U.K., and just about every other country on this planet. Note that China’s holding as of January 2009 was $739 billion vs. the $3.178 trillion owned by all foreign countries combined. The vast majority of the U.S. national debt are held by the American public.
The chart above shows the top trading partners for the U.S.. Note that Canada and Mexico are on the top 3 due to their proximity to the U.S.. China’s $345billion for the first 10 months in 2008 is only about 12% of total U.S. imports and exports.
Bottom line: The American public wanting to tackle their national debt, more aggressive trade policies with China will not yield much difference.