China's Influence on Us Economy

It is no secret that China owns a large chunk of the U.S deficit. The U.S. has gone into debt to combat a complete collapse of its economy after the collapse of the housing market in early 2008. Once the housing market went downhill, it was quickly followed by the automobile market and the job market. That put the U.S into survival mode, which has allowed the Chinese to purchase the amount of debt they have. By holding the purse strings, China could be the savior the current administration is hoping for or China could leave the U.S high and dry with no hope of recovery.

Since the U.S is so beholden to China, China’s agenda may become part of U.S. domestic policy. In early 2009, China’s Premier, Wen Jinbao expressed concerns over the U.S.’s ability to repay its already staggering debt obligations and stated that the U.S. should be nice to the countries that help to support it (Simpkins, 2009). The thinly veiled threat that statement contains could lead the U.S. to bend its current policies to allow China to control more than the national debt, which could include economic policy from concerns over getting repaid and U.S. International policy to favor China, its policies, and its allies. If China’s threat holds true, it could allow China to control what the U.S. does internally and externally, leaving the U.S. on shaky international soil. Recently, the Chinese are encouraging the U.S. to stop the sale of military equipment to Taiwan, citing that this action would undermine relations between the U.S. and China (China warns U.S., 2010). Could that mean that if the U.S. does not behave as the Chinese want that they will quit funding the U.S. recovery?

Currently, the Chinese economy is in a boom period, which could leave the U.S. high and dry (Yanping, 2010). With Chinese manufacturing creating the economic boom, it has no need to artificially create one by loaning money to outside sources in hopes of recovering its investment plus interest. This means that China may...